Con Edison's February 19 Catalyst: Weather Headwind vs. Guidance Tailwind

The immediate trading event is set for February 19, 2026, when Consolidated Edison reports its fourth-quarter 2025 results after the market closes. The core risk/reward setup hinges on a potential disconnect. The stock may already be pricing in a weather-driven miss for the quarter, but the real catalyst for a move will be the company's 2026 guidance that must offset that headwind.

Consensus expectations are for a solid but unremarkable quarter. The market is looking for Q4 EPS of $0.8506 and revenue of $3.71 billion. This forecast is notably higher than the $3.58 billion figure cited by Zacks, highlighting some variance in estimates. The primary overhang is clear: adverse weather patterns, including snowfall and storms, affected service territories during the fourth quarter, which is expected to have hurt electricity demand and disrupted operations.

Yet history suggests the market may be overly pessimistic on weather alone. Con Edison has a track record of consistently beating expectations, with a four-quarter average earnings surprise of 7.69%. The stock has delivered positive EPS surprises in six of the last eight quarters. This pattern implies the company often navigates operational challenges better than anticipated. The February 19 report will test whether that resilience extends to a weather-impacted quarter, or if the headwinds are severe enough to break the streak.

Weather Impact: The Immediate Headwind

The direct financial pressure from the winter storms is clear. Adverse weather patterns, including snowfall and storms, affected some parts of ED's service territories during the fourth quarter. This disrupted services and caused outages, directly hurting electricity demand and pressuring top-line performance. The company's own analysis notes these conditions damaged ED's utility infrastructure, which will also push up repair and restoration costs.

This isn't a one-off operational hiccup. The weather headwind is likely to carry into the early part of 2026, creating a persistent near-term earnings challenge that may extend into the first quarter. For a regulated utility, this is a specific kind of pressure. While the business model provides insulation from volatile commodity prices, the magnitude of the weather impact will test the earnings resilience narrative that has served the stock well. The company's ability to navigate this disruption will be a key factor in the February 19 report.

Key Levels and Trade Thesis

The valuation setup is clear. With a trailing P/E of 19.25, the market is pricing in steady earnings growth, expecting EPS to climb from $5.62 to $5.96 next year. That's a growth rate of just 6.05%. For a utility with a history of beating estimates, this modest premium suggests the stock is already discounting a certain level of operational resilience. The February 19 report will test whether that discount is too generous given the weather headwind.

The trade thesis hinges on two immediate catalysts. First, management must confirm the weather impact is a temporary, one-quarter disruption. Any guidance suggesting the headwind extends into the first quarter would undermine the "temporary" narrative and likely trigger a re-rating lower. Second, the company needs to signal that its planned 2026 capital spending is on track to support future rate case filings. This spending is the engine for long-term growth and regulatory returns.

For the stock to move meaningfully higher on the day, the guidance must provide a clear offset. The market has priced in a weather-impacted quarter, but it needs to see a path to normalizing earnings quickly. If management can articulate that the Q4 weather damage is contained and that the capital program will drive future rate relief, the current valuation may look cheap. The key technical level to watch is the stock's reaction to the earnings release; a break above recent highs on strong guidance could signal a re-rating is underway.

Catalysts and Risks: What to Watch

The definitive test arrives on February 19. The primary catalyst is the release of Q4 results and, more importantly, the company's 2026 capital spending and full-year outlook. The market has priced in a weather-impacted quarter, so the stock's reaction will hinge entirely on management's guidance. A clear signal that the Q4 weather damage is a contained, one-time event, coupled with a reaffirmed path for earnings growth, could spark a re-rating. Any hint that the headwind extends into the first quarter or full-year 2026 would break the resilience narrative and likely trigger a sell-off.

The key risk is straightforward. If management explicitly states that the adverse weather will affect the full-year 2026 EPS forecast, it would shatter the growth story that underpins the current valuation. The stock's trailing P/E of 19.25 implies steady growth, but that premium is vulnerable if the weather headwind becomes a persistent earnings drag. The February 19 report must provide a credible offset to that risk.

Beyond the core earnings, investors should monitor updates on non-core assets. Con Edison's equity investment in Mountain Valley Pipeline, LLC (MVP) has been a source of accretion in recent quarters, though it is excluded from adjusted earnings. Any commentary on the status or future returns from this project could provide a minor earnings tailwind or a distraction. For now, the focus remains on the regulated utility's ability to deliver on its capital program and navigate the immediate weather disruption.