Core Viewpoint - The Zacks Utilities sector is expected to see a 13.2% increase in first-quarter 2025 earnings, driven by new electric, natural gas, and water rates, cost-saving initiatives, and customer growth [1] Group 1: Earnings Expectations - Four utilities, DTE Energy, American Electric Power, Exelon Corporation, and NiSource Inc., are identified as likely to exceed earnings expectations this reporting cycle due to positive Earnings ESP and favorable Zacks Ranks [2] - The Zacks Consensus Estimate for DTE Energy's first-quarter earnings is $1.91, reflecting a 14.4% increase year-over-year [9] - American Electric Power's first-quarter earnings estimate is $1.75, indicating a 37.8% increase from the previous year [11] - Exelon's first-quarter earnings per share estimate is 75 cents, representing an 8.7% year-over-year increase [13] - NiSource's first-quarter earnings estimate is 88 cents, showing a 3.5% increase from the year-ago figure [15] Group 2: Influencing Factors - Utility providers are benefiting from higher electricity rates, accretive acquisitions, cost reductions, and energy-efficiency programs [3] - The shift to renewable energy sources and improvements in electric infrastructure resilience are also contributing positively [3] - Economic improvements in service territories have increased demand for utility services, boosting revenues [5] - The rise of data centers, particularly those supporting AI, has significantly increased electricity consumption, benefiting utility revenues [5] - Lower capital servicing expenses due to a one percentage point reduction in the Fed's fund rate since September 2024 are expected to enhance margins and profitability for capital-intensive utilities [6] Group 3: Challenges - Severe storms in March 2025 caused power outages in some service regions, potentially leading to higher operating expenses for utilities [7] - DTE Energy's profitability may be impacted by severe storms in southeast Michigan, despite benefiting from rising demand from data centers [8] - American Electric Power also faced negative impacts on earnings due to power outages caused by severe storms in its service areas [10]

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Core Viewpoint - The U.S. stock markets are experiencing extreme volatility due to the imposition of new tariffs by the Trump administration, which has raised concerns about a potential global trade war and its impact on the U.S. economy [2][4]. Group 1: Market Overview - The baseline tariff of 10% was imposed on all imports starting April 5, 2025, with rates reaching as high as 145% for certain countries like China [2][3]. - The S&P 500 index is currently in correction territory, having declined by 8.6% year to date, and was trading close to bear market levels last week [5]. Group 2: Featured Stocks - A selection of stocks that have provided double-digit returns year to date includes American Water Works Co. Inc. (AWK), Exelon Corp. (EXC), CenterPoint Energy Inc. (CNP), The Progressive Corp. (PGR), and Brown & Brown Inc. (BRO), all carrying a Zacks Rank 2 (Buy) [6]. Group 3: American Water Works Co. Inc. (AWK) - AWK is benefiting from contributions from acquired assets and military contracts, with new water and wastewater rates enhancing performance [7]. - The company is expanding its operations through both organic and inorganic initiatives, with 17 pending acquisitions expected to add 24,200 customers [9]. - AWK has projected revenue and earnings growth rates of 1.6% and 6.1%, respectively, for the current year, with a recent 0.2% improvement in the earnings consensus estimate [10]. Group 4: Exelon Corp. (EXC) - Exelon's investments are aimed at strengthening its transmission and distribution infrastructure, with initiatives in grid modernization expected to enhance service reliability [11]. - The company anticipates revenue and earnings growth rates of 4.2% and 6.4%, respectively, for the current year, with a 0.8% improvement in the earnings consensus estimate over the last 30 days [12]. Group 5: CenterPoint Energy Inc. (CNP) - CNP is positioned to benefit from increasing electricity demand driven by the electrification of transportation and investments in renewable energy [13]. - The company has an expected revenue and earnings growth rate of 3.2% and 8%, respectively, for the current year, with a 0.6% improvement in the earnings consensus estimate over the last 60 days [16]. Group 6: The Progressive Corp. (PGR) - PGR is experiencing growth due to higher premiums and a strong product portfolio, focusing on becoming a one-stop insurance destination [17]. - The expected revenue and earnings growth rates for PGR are 16.1% and 10.9%, respectively, with a 1% improvement in the earnings consensus estimate over the last seven days [18]. Group 7: Brown & Brown Inc. (BRO) - BRO's growth trajectory is supported by a compelling portfolio and strategic initiatives that enhance its capabilities and geographic reach [19]. - The company has projected revenue and earnings growth rates of 8.4% and 9.1%, respectively, for the current year, with a 0.2% improvement in the earnings consensus estimate over the last 30 days [20].

Core Viewpoint - Exelon Corporation (EXC) is positioned as a strong investment option in the utility sector due to its systematic investments aimed at enhancing transmission and distribution infrastructure, which will improve service reliability and operational resilience [1] Group 1: Growth Projections - The Zacks Consensus Estimate for 2025 earnings per share (EPS) has risen by 1.1% to $2.66 over the past 60 days [2] - The Zacks Consensus Estimate for 2025 sales is projected at $23.99 billion, reflecting a year-over-year increase of 4.2% [2] - Exelon's long-term earnings growth rate is estimated at 5.99%, with a trailing four-quarter average earnings surprise of 7.6% [2] Group 2: Solvency - The time-to-interest earned ratio at the end of Q4 2024 was 2.4, indicating the company's strong ability to meet future interest obligations [3] Group 3: Dividend Growth - Exelon has declared a quarterly dividend of 40 cents per share for Q1 2025, leading to an annualized dividend of $1.60 [4] - The company aims to increase its dividend per share at a rate of 5-7% annually through 2028, subject to board approval, with a long-term dividend payout ratio projected at 60% [5] - Exelon's current dividend yield stands at 3.41%, outperforming the Zacks S&P 500 composite average of 1.38% [5] Group 4: Strategic Investments - Exelon plans to invest nearly $38 billion in regulated utility operations from 2025 to 2028, marking a 10% increase from previous plans [6] - The investment allocation includes $21.7 billion for electric distribution, $12.6 billion for electric transmission, and $3.8 billion for gas delivery [6] Group 5: Share Price Performance - Over the past three months, Exelon's stock has returned 19.1%, significantly outperforming the industry's growth of 1.8% [7]

Market Overview - U.S. stock markets are experiencing extreme volatility in April due to the "Liberation Day" tariffs imposed by the Trump administration, with a baseline tariff of 10% on all imports and rates as high as 145% for certain countries like China [1][2] - The S&P 500 index is currently in correction territory, trading almost in bear market zone, with a year-to-date decline of 8.6% [3] Investment Opportunities - Despite the overall market downturn, a handful of S&P 500 stocks have provided double-digit returns year to date, with five recommended stocks carrying a favorable Zacks Rank of 2 (Buy): American Water Works Co. Inc. (AWK), Exelon Corp. (EXC), CenterPoint Energy Inc. (CNP), The Progressive Corp. (PGR), and Brown & Brown Inc. (BRO) [4] American Water Works Co. Inc. (AWK) - AWK is benefiting from contributions from acquired assets and military contracts, with new water and wastewater rates boosting performance [8] - The company is expanding operations through organic and inorganic initiatives, with 17 pending acquisitions expected to add 24,200 customers [10] - AWK has expected revenue and earnings growth rates of 1.6% and 6.1%, respectively, for the current year, with a 0.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] Exelon Corp. (EXC) - Exelon's investments are aimed at strengthening its transmission and distribution infrastructure, with initiatives in grid modernization improving operational resilience [12] - The company has expected revenue and earnings growth rates of 4.2% and 6.4%, respectively, for the current year, with a 0.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [13] CenterPoint Energy Inc. (CNP) - CNP is positioned to benefit from increasing electricity demand due to the electrification of transportation and investments in renewable energy [14] - The company has expected revenue and earnings growth rates of 3.2% and 8%, respectively, for the current year, with a 0.6% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [17] The Progressive Corp. (PGR) - PGR is gaining from higher premiums and a strong product portfolio, focusing on becoming a one-stop insurance destination [18] - The company has expected revenue and earnings growth rates of 16.1% and 10.9%, respectively, for the current year, with a 1% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [19] Brown & Brown Inc. (BRO) - BRO's growth trajectory is driven by organic and inorganic initiatives, enhancing its capabilities and geographic reach [20] - The company has expected revenue and earnings growth rates of 8.4% and 9.1%, respectively, for the current year, with a 0.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [22]

Group 1 - Exelon (EXC) has a strong history of beating earnings estimates and is well-positioned for continued success in its upcoming quarterly report [1][2] - The company has surpassed earnings estimates by an average of 7.22% over the last two quarters, with a recent surprise of 8.47% for the latest quarter [2] - Recent estimates for Exelon have been increasing, indicating a positive outlook for its earnings potential [4][7] Group 2 - Exelon currently has an Earnings ESP of +1.05%, suggesting analysts are optimistic about its near-term earnings [7] - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) indicates a high likelihood of another earnings beat [7] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [5]

Market Overview - Wall Street is anticipating a challenging start to the week, with fears of a repeat of the 1987 Black Monday, which saw a 22.6% market plunge [5][6] - Major indexes, including Dow, S&P 500, and Nasdaq, are expected to open 6% lower, potentially making last week's $6.6 trillion losses appear minor [6] Economic Impact - President Trump's recent tariffs have caused global market turmoil, leading to uncertainty among investors regarding future market reactions [6][7] - Trump stated he would not engage in trade deals until trade deficits are addressed, which may prolong market distress until clarity on the tariffs' economic impact is achieved [7] Investment Recommendations - In light of the current market conditions, investing in safe-haven stocks, particularly in the utilities sector, is advised [3][4] - Recommended utility stocks include: - **Avista Corporation (AVA)**: Expected earnings growth rate of 14%, Zacks Rank 1, beta of 0.38, and a dividend yield of 4.81% [9] - **CMS Energy Corporation (CMS)**: Expected earnings growth rate of 7.8%, Zacks Rank 2, beta of 0.34, and a dividend yield of 2.99% [11] - **Exelon Corporation (EXC)**: Expected earnings growth rate of 6.4%, Zacks Rank 2, beta of 0.39, and a dividend yield of 3.53% [13] - **Southwest Gas Holdings, Inc. (SWX)**: Expected earnings growth rate of 17.1%, Zacks Rank 2, beta of 0.50, and a dividend yield of 3.60% [15]

Core Viewpoint - Investors in the Utility - Electric Power sector should consider Exelon (EXC) and WEC Energy Group (WEC) as potential undervalued stocks [1] Group 1: Investment Metrics - Both Exelon and WEC Energy Group currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - Value investors typically analyze traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [4] Group 2: Valuation Comparisons - Exelon has a forward P/E ratio of 17.31, while WEC has a forward P/E of 20.79, suggesting Exelon may be the more attractive option based on this metric [5] - Exelon’s PEG ratio is 3.03, compared to WEC’s PEG ratio of 3.06, indicating similar expected earnings growth rates [5] - Exelon has a P/B ratio of 1.72, while WEC’s P/B ratio is 2.70, further supporting Exelon’s stronger valuation profile [6] - Based on these valuation metrics, Exelon is rated with a Value grade of B, while WEC has a Value grade of D, highlighting Exelon as the superior value option [6][7]

Core Viewpoint - Exelon (EXC) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][4]. - Rising earnings estimates for Exelon suggest an improvement in the company's underlying business, likely leading to increased stock prices [5]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Exelon's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions for Exelon - For the fiscal year ending December 2025, Exelon is projected to earn $2.65 per share, reflecting a 6% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Exelon has risen by 0.4%, indicating a positive trend in earnings expectations [8].