Constellation Energy Group?s financial well-being has gotten even better since it pulled out of a deal to merge with the Florida-based FPL Group.
“Constellation Energy Group Inc., a large-cap value company in the public utilities sector, is expected to significantly outperform the market over the next six months with very low risk,” Gradient Analytics Inc. said.
Shares in Constellation Energy, parent company of Baltimore Gas & Electric and a host of other energy-related holdings, began December up more than 18 percent over the price of the stock in December 2005, company chairman, president and chief executive officer Mayo A. Shattuck III told investors at its annual meeting. At midday Tuesday, shares were trading at $69.25, not far off the 52-week high of $70.22.
The merger deal with FPL Group fell apart in October amid political upheaval in Maryland over a 72 percent rate hike.
Even though Constellation agreed to remain a freestanding company throughout 2007, Shattuck said another merger is not out of the question in years to come. “I continue to believe, despite the turn of events in 2006, that consolidation will occur when the political winds become more favorable,” he said.
Paul Justice, a stock analyst with Morningstar, said while Constellation earnings from its divisions that market energy to other companies are strong, among its most valuable asset is BGE.
“BGE has earned several important concessions from regulators, such as performance incentives and weather normalization,” Justice said. “This makes it an attractive utility. With the recent implementation of a rate stabilization plan in Maryland, our previous concerns about BGE?s ability to collect cash from customers to pay for higher-priced power has eased.”
