DCF Studio

    ED · NYQ · Utilities

    Consolidated Edison, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 26.93

    Market price

    USD 118.48

    Implied upside

    -77.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 29.2% of revenue against depreciation of 13.7%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 26.93-77.3%
    Exit multiple
    USD 97.09-18.1%
    Market price
    USD 118.48

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 17.8bnUSD 18.7bnUSD 19.5bnUSD 20.4bnUSD 21.2bnUSD 22.0bnUSD 22.8bnUSD 23.5bnUSD 24.2bnUSD 24.8bn+3.8%
    EBITUSD 3.0bnUSD 3.2bnUSD 3.3bnUSD 3.5bnUSD 3.6bnUSD 3.8bnUSD 3.9bnUSD 4.0bnUSD 4.1bnUSD 4.2bn+3.8%
    NOPATUSD 2.4bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bn+3.8%
    Add depreciation & amortisationUSD 2.4bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bn+3.8%
    Less capital expenditureUSD -5.2bnUSD -5.2bnUSD -5.3bnUSD -5.3bnUSD -5.3bnUSD -5.2bnUSD -5.1bnUSD -5.0bnUSD -4.9bnUSD -4.8bn-0.9%
    Capex, % of revenue29.2%28.1%27.0%25.9%24.8%23.7%22.6%21.5%20.4%19.3%-
    Less increase in working capitalUSD -60.4mUSD -65.0mUSD -63.9mUSD -62.4mUSD -60.5mUSD -58.0mUSD -55.1mUSD -51.8mUSD -48.0mUSD -43.7m-3.5%
    Free cashflow to firmUSD -356.1mUSD -170.5mUSD 40.3mUSD 270.7mUSD 519.7mUSD 786.4mUSD 1.1bnUSD 1.4bnUSD 1.7bnUSD 2.0bn-
    Discount factor0.97040.91380.86050.81030.76300.71850.67660.63710.60000.5650-
    Present valueUSD -345.6mUSD -155.8mUSD 34.7mUSD 219.3mUSD 396.6mUSD 565.0mUSD 723.4mUSD 870.5mUSD 1.0bnUSD 1.1bn-
    Present Value Of The ForecastUSD 4.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.479Reported 0.223, pulled toward 1.0 (Blume)
    Cost of equity6.92%Risk-free + beta x equity risk premium
    Cost of debt6.27%Risk-free + 138bp, the spread for a BB+ rating at 2.4x interest cover. Book interest / average debt was lower, at 4.4%.
    Market capitalisationUSD 43.8bn60.7% of capital
    Total debtUSD 28.4bn39.3% of capital, book value as a proxy
    Tax rate19.2%Effective, capped at statutory
    WACC6.19%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 26.93

    88% of EV

    Forecast FCFF, final year
    USD 2.0bn
    Capex at depreciation, working capital in reinvestment
    USD 3.4bn
    Less reinvestment at g/ROIC (40.4% of NOPAT)
    USD -1.4bn
    Capitalised
    USD 2.0bn
    ROIC (WACC floor)
    6.2%
    Terminal value, undiscounted
    USD 56.6bn
    Terminal value, discounted
    USD 32.0bn
    Enterprise value
    USD 36.4bn
    Less net debt
    USD 26.7bn
    Equity value
    USD 9.7bn

    Exit at 13.3x EBITDA

    Value per shareUSD 97.09

    93% of EV

    Terminal value, undiscounted
    USD 101.1bn
    Terminal value, discounted
    USD 57.1bn
    Enterprise value
    USD 61.6bn
    Less net debt
    USD 26.7bn
    Equity value
    USD 34.8bn

    Spread between methods: 113%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.19%105.60107.34111.82122.51152.79
    5.19%57.5055.0752.6450.2047.77
    6.19%30.7728.8526.9325.0023.08
    7.19%11.7710.218.647.085.51
    8.19%-2.36-3.66-4.96-6.26-7.56

    Outlined: this model. Green text: above today's price of 118.48. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.6%3.9%11.0%
    EBIT margin17.9%17.1%28.4%
    Discount rate-6.2%4.1%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.