ConEd, Spire Downgraded by Bank of America Amid Regulatory Uncertainties and Execution Risks

Bank of America has downgraded Consolidated Edison (ED) and Spire (SR) due to regulatory uncertainties and execution risks. Consolidated Edison's average price target shows a modest upside, while Spire faces potential execution risks post-acquisition. Investors should consider current valuation metrics, such as the GF Value, when evaluating these stocks.

Bank of America (BofA) has downgraded Consolidated Edison Inc. (ED) and Spire Inc. (SR) to Underperform, citing concerns over their financial performance and regulatory uncertainties. The utility companies' stocks fell by 2.3% and 1.8% respectively, following the announcements.

Consolidated Edison Inc., a major utility provider in New York, faced a tougher regulatory backdrop and heightened affordability pressures. BofA analysts downgraded the company from Buy to Underperform, citing a challenging regulatory environment and a steep first-year rate increase in the company’s latest rate case filing. The proposed increase of ~18% in electric revenue drew strong pushback from the New York Public Service Commission (PSC), which recommended a much smaller increase and a lower return on equity (ROE). Additionally, upcoming political changes could reshape regulatory dynamics, adding further uncertainty.

Spire Inc., on the other hand, was downgraded from Neutral to Underperform due to concerns over its $2.48 billion acquisition of Piedmont Natural Gas announced on July 29, 2025. BofA Securities cited limited near-term earnings accretion due to premium purchase multiples, financing uncertainty, and modest synergy potential. The bank also noted below-average earnings growth, elevated funding costs, and execution risks from the company’s expanding footprint. Spire is not expected to see a material improvement in its return on equity until 2026, when Missouri’s future test year framework takes effect.

Investors should consider current valuation metrics, such as the GF Value, when evaluating these stocks. BofA has cut its price targets to $101 for Consolidated Edison and $76 for Spire, indicating limited upside under the current regulatory and political climate.

References:
[1] https://www.ainvest.com/news/consolidated-edison-spire-downgraded-underperform-bofa-2508/
[2] https://za.investing.com/news/stock-market-news/bofa-doubledowngrades-consolidated-edison-on-regulatory-headwinds-shares-slip-3842704
[3] https://site.financialmodelingprep.com/market-news/fmp-bofa-downgrades-spire-to-underperform-following-acquisition