Why Exelon Corporation Might Be an Electric Opportunity

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Exelon  (NYSE: EXC  ) climbed 4% today after Credit Suisse upgraded the utilities company from neutral to outperform.

So what: Along with the upgrade, analyst Dan Eggers boosted his price target to $35 (from $23), representing about 12% worth of upside to yesterday's close. So while contrarians might be turned off by the stock's rebound in recent months, Eggers' call suggests that a good chunk of Exelon's turnaround potential still isn't baked into the valuation. 

Now what: According to Credit Suisse, Exelon's risk/reward trade-off is rather attractive at this point. "We believe expectations and fundamentals for competitive power have found a bottom, with the potential for a long awaited recovery to take form over the next 12 months," said Eggers. "We are upgrading EXC to Outperform with a $35 target price and 4.1% dividend yield, offering 16.7% total return potential with leverage to a number of business/market drivers." When you couple those solid return prospects with the stable nature of Exelon's business model, it's tough to disagree with Credit Suisse's bullishness. 

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