Key Takeaways for Exelon Stock
- Revenue grew 8% year-over-year to $7.24 billion in Q1 2026, beating Street estimates by $153 million.
- Operating margins held at 22% in Q1 2026, consistent with the prior two quarters and up from 17% in Q1 2024.
- Exelon pivoted its $41.7 billion capital plan, cutting $1.1 billion in distribution investment and adding $1.5 billion in transmission, targeting 16% transmission rate base growth through 2029.
- TIKR’s mid-case values Exelon stock at approximately $68 by December 2030, implying around 50% total return from the current price of $45.
Exelon Beats Q1 Estimates and Pivots Its Capital Plan Toward Transmission
Exelon Corporation (EXC), the nation’s largest regulated electric utility, reported Q1 2026 adjusted operating earnings of $0.91 per share following its May 6 earnings call, exceeding the Street estimate of $0.89 per share and beating revenue forecasts by over $150 million.
The beat came with a significant strategic pivot attached.
CEO Calvin Butler announced that Exelon was withdrawing its PECO electric and gas rate cases in Pennsylvania, citing affordability pressure and stakeholder feedback in Q1 earnings call: “Our decision to remove the Pennsylvania filing was based on conversations we had with a variety of stakeholders. And those stakeholders said, ‘Hey, if you could partner with us to address the affordability issue and lean in, timing is not the best right now.'”
Pennsylvania’s regulatory environment had grown turbulent, with the governor publicly calling for justifiable returns and transparent ratemaking. CFO Jeanne Jones confirmed PECO is now on review for a credit rating downgrade, though she framed Exelon’s diversified six-utility platform as the buffer: “As a whole, I think from an Exelon perspective, Pennsylvania is one piece for managing this as a portfolio.”
To offset the distribution pullback, Exelon added $1.5 billion in transmission investment to its four-year capital plan, now totaling $41.7 billion through 2029. Transmission rate base is now targeted to grow at 16% annually through 2029, with $12 billion to $17 billion in additional transmission opportunities sitting outside the current plan.
The company submitted competitive bids for two Illinois transmission projects totaling approximately $1.9 billion in the MISO Tranche 2.1 window and signaled two additional bids expected later in May.
The company reaffirmed its 2026 adjusted operating earnings guidance of $2.81 to $2.91 per share, targeting midpoint or better, and its long-term EPS growth outlook near the top end of 5% to 7% from 2025 to 2029. It also announced $350 million in incremental O&M savings targeted for 2027 through contractor reductions, AI-driven efficiency programs, and a voluntary separation offering.
Exelon Stock’s Operating Margin Holds Steady While the Capital Mix Shifts Underneath It
Exelon stock’s operating margins landed at 22% in Q1 2026, matching the 22% posted in both Q3 2025 and Q4 2025 and representing a meaningful step up from the 17% recorded in Q1 2024.
The consistency in margin over the past three quarters is the analytical signal worth isolating: total revenues reached $7.24 billion in Q1 2026 versus $6.71 billion in Q1 2025, an 8% year-over-year gain, while operating income came in at $1.61 billion against $1.55 billion in the prior-year quarter, a 4% increase.
Revenue is expanding faster than operating income, which tells the story correctly: higher fuel and purchased power costs moved to $2.78 billion in Q1 2026 from $2.52 billion in Q1 2025, absorbing a portion of the top-line gain and keeping operating leverage constrained.
Operations and maintenance expense also rose, to $1.47 billion in Q1 2026 from $1.35 billion in Q1 2025, the largest O&M quarterly figure in the eight-quarter dataset provided, which is why the $350 million in 2027 cost target carries weight.
The 22% operating margin in Q1 2026 also compares favorably to the trailing eight-quarter range: margins ran between 17% and 23%, with Q1 2025’s 23% representing the recent high and Q1 2024’s 17% representing the trough, meaning Exelon stock has recovered from that floor and stabilized in the low-20s.
The transmission capital reallocation matters here because transmission assets earn regulated returns on a larger rate base without the customer-facing affordability friction that distribution investments now face in Pennsylvania and Maryland, which means the mix shift is designed to protect margin quality even as O&M pressures persist.
Exelon Trails Dominion and Duke on Operating Margins, but the Gap Is Narrowing
Exelon stock’s 22% operating margin in Q1 2026 sits structurally below both Dominion Energy (D) at 29% and Duke Energy (DUK) at 26% for the same period, a gap that has persisted across every quarter in the dataset.
The spread is most visible at the seasonal peaks: in Q3 2025, Dominion posted 35% operating margins while Exelon stock reached only 22%, a 13-point gap driven partly by Dominion’s higher-margin generation and midstream exposure within its regulated structure.
What the data also shows, however, is that Exelon stock’s margin recovery from its Q1 2024 trough of 17% to the current 22% is the steepest upward move among the three utilities over the period, while Duke held a narrower range between 15% and 31% and Dominion ranged from 24% to 36%, neither showing the same trough-to-stability trajectory.
Is Exelon Stock Undervalued in 2026? TIKR’s $68 Model Points to 50% Upside
TIKR’s mid-case values Exelon stock at approximately $68 by December 2030, implying around 50% total return from the current price of $45, or roughly 9% annualized over approximately 4.6 years.
If transmission rate base grows at 16% as guided and the $350 million in 2027 O&M savings materialize, Exelon stock reaches the mid-case scenario, supported by the TIKR model’s assumption of around 4% revenue growth and roughly 14% net income margins.
The bear case, at approximately $70, implies around 55% total return, while the high case at approximately $93 assumes around 105% total return with around 9% annualized IRR.
If the PECO regulatory overhang worsens or capital plan delays emerge, the low case at approximately $70 reflects around 5% annualized return, suggesting the downside is still positive but modest.
The current price of $45 offers a notable margin to the mid-case, with the primary condition being that Exelon executes the transmission pivot without further distribution-side earnings erosion.
Is Exelon stock a buy right now?
The TIKR mid-case values Exelon stock at approximately $68 by December 2030, implying around 50% total return from the current price of $45.
The company reaffirmed 2026 EPS guidance of $2.81 to $2.91 and is targeting EPS growth near the top of 5% to 7% annually through 2029.
The primary risk is regulatory pressure in Pennsylvania and Maryland, which has already prompted the PECO rate case withdrawal and contributed to a credit rating review.
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