"Exelon: Strong Buy Amid Data Center Expansion and Regulatory Tailwinds"

Initiate Strong Buy | $68 PT  Exelon Corporation is a premier North American utility holding company

with a diversified portfolio of Generation, Transmission and Distribution assets operating throughout a handful of large metropolitan markets. Beneath the shell of a traditional utility is a fundamentally inflecting business - Exelon sits at the intersection of a once-in-a-lifetime data center buildout & intensifying electrification of industry. Consensus would paint Exelon as an anally-slow, rate-case-dependent asset, but more than half of next year’s funding needs are already underwritten and the comp is primed to deploy $38bn in capital through 2028 to drive the ~7.4% forward rate-base uplift. Our $9.16bn FY25E base EBITDA (5.7% growth to $9.68bn FY26E) is deliberately substantially below Street - we exclude proximity Maryland noise and assume more disciplined regulatory cadence - but even at this base level, EXC’s mix of newly won RtD rates, density-driven load interconnection and O&M control drive fundamental earnings momentum with each 1% of rate-base growth accruing to EBITDA upside. Our 12.0x FY26E EV/EBITDA target multiple remains modestly below peer median given regulatory discretion but with asymmetric duration sensitivity as Treasury fade and utilities re-rate higher, while financing risk fades with management proactively underwriting ~60% required equity and padding interest expense future macro deterioration. Downside includes adverse regulation and re-accelerating rates but these are largely priced-in and, in our view, already over-discounted. The asymmetric bear and bull scenarios is startling with near-term execution de-risked and secular drivers just starting to be priced in. EXC offers one of the most