Exelon raised at KeyBanc as utilities set to stage a comeback
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Exelon (EXC
+1.3%) is upgraded to Overweight from Sector Weight with a $68 price target at KeyBanc, which also downgrades Public Service Enterprise Group (PEG
+0.7%) to Sector Weight from Overweight on valuation.
KeyBanc's Sophie Karp says the separation of Exelon and Constellation "creates a premium T&D utility and a standalone merchant power company that stands to benefit from the clean energy transition."

Karp says the split will provide "a clear line of sight into growth prospects of both entities," and the sum of the parts will be greater than the whole.
Believing the utilities sector (XLU
+0.7%) has "a good shot" at outperforming the market in the near term, Karp taps Dominion Energy (D
+0.3%) and Xcel Energy (XEL
+0.9%) as "key ideas" in the regulated space entering 2022, with sufficient long-term growth opportunities to merit sustained premiums.
The analyst affirms her Underweight ratings for Consolidated Edison (ED
+1.1%) and Pinnacle West (PNW
+0.9%), as both face an unfavorable regulatory backdrop with limited room for a short-term turnaround.
The coming spinoff of Constellation Energy from Exelon is "a great opportunity to own the best-run nuclear operator at the perfect time," Gary Gambino writes in a bullish analysis newly published on Seeking Alpha.