Consolidated Edison, Inc. (ED) Stock Valuation — DCF Analysis
Regulated Electric · NYSE
Current Price
$107.74
Intrinsic Value
$125.77
+14.3% margin of safety
COMPETITIVE MOAT
↑Regulated Monopoly Power
ED operates as a regulated utility, granting it exclusive rights to serve its vast customer base in New York City and Westchester. This regulatory structure creates a significant barrier to entry for competitors.
↑Essential Service Infrastructure
The company owns and maintains critical, long-lived infrastructure for electricity and gas delivery. Replacing this extensive network would be prohibitively expensive and time-consuming for any potential rival.
↑Dividend Aristocrat Status
ED's long history of consistent dividend increases attracts income-focused investors. This reliability fosters customer loyalty and provides a stable funding source for operations and growth.
INVESTMENT RISKS
↓Regulatory Scrutiny and Rate Cases
As a regulated entity, ED is subject to periodic rate reviews by state commissions. Unfavorable decisions could limit its ability to recover costs and achieve desired returns.
↓Aging Infrastructure Modernization
The company faces ongoing challenges and significant capital expenditures to upgrade and maintain its aging infrastructure. Delays or cost overruns in these projects pose a risk.
↓Transition to Renewables
While ED is investing in renewables, the broader energy transition presents uncertainty regarding future energy sources and demand. Adapting to evolving energy policies is crucial.
Base case
ED base case valuation
A base case discounted cash flow model for ED estimates an intrinsic value of about $125.77 per share, against a current price of $107.74. The model assumes 6.5% annual free cash flow growth, a 10.0% discount rate, and a 14x exit multiple.
Intrinsic Value
$125.77
Margin of safety
+14.3%
Expected annual return
+3.1%
Base case assumptions: 6.5% annual growth, 10.0% discount rate, 14x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ED valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Consolidated Edison, Inc. respond.
Open DCF Calculator for EDCompany Overview
Consolidated Edison, Inc., through its various subsidiaries, primarily operates in the regulated sectors of electricity, natural gas, and steam distribution across the United States. The company supplies electric power to approximately 3.5 million households and businesses in New York City and Westchester County. It also delivers natural gas to about 1.1 million customers located in Manhattan, the Bronx, specific parts of Queens, and Westchester County, while providing steam services to around 1,555 clients in certain Manhattan areas. Beyond these core regions, Consolidated Edison extends its electricity provision to roughly 300,000 customers in southeastern New York and northern New Jersey, and serves approximately 100,000 natural gas consumers in southeastern New York. Its extensive operational framework encompasses 533 circuit miles of transmission lines and 15 transmission substations. For distribution, it manages 64 substations, 87,564 in-service line transformers, 3,924 pole miles of overhead lines, and 2,291 miles of underground cabling. The natural gas network further includes 4,350 miles of main pipelines and 377,971 service connections. The company also engages in owning, operating, and developing projects for renewable energy and broader energy infrastructure. Furthermore, it offers a range of energy-related products and services to both wholesale and retail markets, and strategically invests in new electric and gas transmission ventures. Its electricity sales are predominantly directed toward industrial, commercial, residential, and governmental clients. Established in 1823, Consolidated Edison's corporate headquarters are situated in New York, New York.
Financial Metrics — ED Stock Valuation Data
Revenue/Share (TTM)
$47.42
FCF/Share (TTM)
$7.75
ROIC (TTM)
3.2%
ROE (TTM)
8.8%
P/FCF
14.1x
EV/EBITDA
9.6x
FCF Yield
7.09%
Debt/Equity
1.06x
Based on trailing twelve-month data, ED shows a free cash flow per share of $7.75 and a ROIC of 3.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 14.1x and FCF yield of 7.09% are important context metrics when evaluating ED's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ED?
Consolidated Edison, Inc. currently generates $7.75 in free cash flow per share. At the current price of $107.74, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ED undervalued?
ED trades at a P/FCF ratio of 14.1x with a free cash flow yield of 7.09%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether ED is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ED stock using DCF?
To perform a DCF valuation on Consolidated Edison, Inc.: (1) Start with the trailing free cash flow per share ($7.75) as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ED's risk profile — with a debt-to-equity of 1.06x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ED?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Consolidated Edison, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Regulated Electric trends, then discounting those amounts to today's dollars. ED's ROIC of 3.2% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect ED stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ED, with a debt-to-equity ratio of 1.06x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 9.6x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ED PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Utilities valuationsDCF and P/E value ED with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.