Talen Energy Corp (TLN) has received a new Buy rating, initiated by Morgan Stanley analyst, David Arcaro.
David Arcaro’s rating is based on several compelling factors that suggest Talen Energy Corp’s stock is undervalued with significant growth potential. The core power plant fleet of Talen Energy is attractively priced, and there are multiple credible opportunities for upside. These include the potential for higher power prices, an expansion of the data center contract with Amazon at the Susquehanna nuclear plant, and the possibility of securing new data center contracts at Talen’s gas plants.
Furthermore, the company’s stock is trading at a level that does not account for the additional value from potential new data center contracts, presenting an attractive entry point for investors. Despite recent market volatility, the outlook for power demand remains bullish, supported by strong trends in hyperscaler capital expenditure and constrained access to power. The risk-reward profile appears highly skewed to the upside, with significant potential gains from expanding the Amazon contract, new data center deals, and improving PJM market fundamentals.
In another report released on March 6, Bank of America Securities also maintained a Buy rating on the stock with a $234.00 price target.