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Nuclear Power Puts a Glow on Exelon



Business Week: February 12, 2001
Inside Wall Street

Nuclear Power Puts a Glow on Exelon

Little-known Big Board stock Exelon (EXC) is a novel way to play 
the energy crisis--which is being fueled in part by the high price of 
natural gas. Exelon stock exploded from 42 in July to 71 on Dec. 
27. It has since pulled back to 60--a fine entry point, say some 
pros, for a stock they see at 80 in a year.

   Exelon, which generates and markets energy, was formed 
through the merger in October of Philadelphia's Peco Energy and 
Unicom, which provides electricity to 3.5 million Chicago 
customers.

   ``The kicker in Exelon is that it owns and operates, through 
Unicom, the largest network of nuclear plants in the U.S.,'' says 
Stephen Leeb, editor of Personal Finance. Exelon's nuclear 
installations, which generate electricity at one-third the cost of 
using natural gas, aren't yet fully reflected in the stock price, says 
Leeb.

   Steven Fleishman of Merrill Lynch, who rates Exelon a buy, says 
Exelon's 17,000-megawatt nuclear capability ``looks like a gold 
mine''--with natural gas prices much higher than a year ago. 
Exelon, he says, can achieve internal growth from its nuclear 
energy by upping capacity at low cost. Exelon co-CEO John Rowe 
says its nuclear plants helped ensure a reliable supply of electricity 
in a period of record demand.

   Paul Patterson of Credit Suisse First Boston   rates Exelon a 
buy because he thinks it could become one of the preeminent 
power companies in North America, with its size and scope.

   At 12.7 times 2001's estimated earnings per share of $4.70 and 
10.9 times 2002's $5.50, Exelon is cheap, says Leeb. His 18-
month target: 100.
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