Exelon (EXC) offers strong regulatory stability but is offset by continued affordability pressures and slower growth profile, RBC Capital Markets said in a note Tuesday.

The analysts said the company benefits from high regulatory certainty, with roughly 90% of its rate base protected by established cost-recovery mechanisms. This limits regulatory risk despite political pressure around affordability. The main area to watch is BG&E, which is expected to file a new multi-year plan in early 2026, though little to no rate increases appear necessary to earn its allowed returns.

Exelon's earnings growth looks slower in the near term because 2025 is already a strong year, making the compound annual growth rate, or CAGR, "optically more challenging," the analysts said, adding that while the company has identified $10 billion to $15 billion of potential upside capital spending, most of this is beyond the current five-year plan, and limited near-term additions are expected.

"Valuation is undemanding and positive revisions may be slowing, but we wait for a better entry point," analysts said, adding that RBC is resuming coverage of Exelon with a sector perform rating and a $51 price target, compared with $42 previously.

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