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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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