Constellation Energy Corporation (CEG) AI Stock Analysis

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Constellation Energy Corporation

(NASDAQ:CEG)

Rating:75Outperform

Price Target:

$324.00

▲(8.17%Upside)

Constellation Energy Corporation demonstrates strong technical momentum and a positive earnings outlook, driven by strategic initiatives in clean energy and data center demand. However, financial performance concerns such as negative cash flows and declining net margins temper the overall score. Valuation remains moderate, as the stock is reasonably priced but not undervalued.

Positive Factors

Clean Energy Strategy

Constellation Energy Corporation is seen as a differentiated story due to its position as the largest producer of carbon-free generation and its burgeoning clean product strategy.

Earnings

The transaction is expected to be approximately 5.0% accretive to earnings per share, EBITDA, and adjusted free cash flow to equity on an average annualized basis.

Market Position

CEG's expected price is significantly above the prevailing PTC floor, indicating a strong market position.

Negative Factors

Downgrade

CEG is downgraded to Neutral/High Risk from Buy/High Risk due to revised assumptions on future hyperscaler PPAs and scarcity value of existing power plants.

Financial Disclosure

No specific financial details or commitments associated with the Purchase Power Agreement have been disclosed, highlighting the competitive nature of the market.

Power Prices

The virtual PPA with Meta has the potential to reduce reliability and increase power prices for the general public depending on when and where the new hyperscaler load is added.

Constellation Energy Corporation (CEG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$98.11B

Dividend Yield0.49%

Average Volume (3M)3.28M

Price to Earnings (P/E)33.0

Beta (1Y)1.66

Revenue Growth11.36%

EPS Growth26.54%

CountryUS

Employees14,215

SectorUtilities

Sector Strength80

IndustryRenewable Utilities

Share Statistics

EPS (TTM)2.14

Shares Outstanding313,417,360

10 Day Avg. Volume3,508,995

30 Day Avg. Volume3,282,305

Financial Highlights & Ratios

PEG Ratio0.73

Price to Book (P/B)6.47

Price to Sales (P/S)0.00

P/FCF Ratio-16.91

Enterprise Value/Market Cap0.92

Enterprise Value/Revenue0.99

Enterprise Value/Gross Profit14.79

Enterprise Value/Ebitda3.73

Forecast

1Y Price Target

$318.36

Price Target Upside6.28% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering13

Constellation Energy Corporation Business Overview & Revenue Model

Company DescriptionConstellation Energy Corporation generates and sells electricity in the United States. The company operates through five segments: Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions. It sells natural gas, renewable energy, and other energy-related products and services. The company has 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas, and hydroelectric assets. It serves distribution utilities; municipalities; cooperatives; and commercial, industrial, governmental, and residential customers. The company was incorporated in 2021 and is headquartered in Baltimore, Maryland. Constellation Energy Corporation was formerly a subsidiary of Exelon Corporation.

How the Company Makes MoneyConstellation Energy Corporation generates revenue primarily through the sale of electricity and natural gas to a wide range of customers, including residential, commercial, and industrial sectors. The company operates power plants that produce electricity, which it then sells in wholesale and retail markets. Additionally, Constellation Energy engages in energy trading and risk management services, which contribute to its earnings. The company also offers energy efficiency solutions and services that help customers manage their energy consumption and costs. Strategic partnerships and investments in clean energy technologies further bolster its revenue streams, allowing the company to capitalize on the growing demand for renewable energy solutions.

Constellation Energy Corporation Key Performance Indicators (KPIs)

Any

Nuclear Generation by Geography

Nuclear Generation by Geography
Maps out nuclear energy production across various locations, reflecting the company's commitment to stable, low-carbon power generation and its strategic positioning in different regulatory environments.

Chart InsightsConstellation Energy's nuclear generation in ERCOT has seen a notable increase since late 2023, reflecting strategic expansion efforts. This aligns with the company's focus on leveraging its clean energy assets to support data center demand, as highlighted in the recent earnings call. The Midwest and Mid-Atlantic regions show stable generation, while New York experiences fluctuations. The company's strong operational performance and strategic acquisitions, like Calpine, are poised to enhance earnings, though regulatory challenges and market overestimation remain potential risks.

Data provided by:

Main Street Data

Constellation Energy Corporation Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 20.82%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong financial and operational performance with strategic advancements in acquisitions and demand growth from data centers. However, challenges remain in regulatory clarity and market overestimation, accompanied by stock price volatility.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

GAAP earnings of $0.38 per share and adjusted operating earnings of $2.14 per share, $0.32 higher than last year. Reaffirmed full-year operating EPS guidance range of $8.90 to $9.60 per share.

Operational Excellence

Nuclear capacity factor of 94.1%, renewable energy capture of 96.2%, and power dispatch match of 99.2%.

Calpine Acquisition

The acquisition is expected to add at least $2 in EPS and $2 billion of free cash flow before growth starting next year.

Demand for Data Centers

Increased demand for power from data centers driven by AI technology, reinforcing the strategic plan and importance of nuclear energy.

Advancements in Interconnection

Over 1,150 new nuclear megawatts, including Crane Clean Energy Center, were chosen for the accelerated interconnection process by PJM.

Negative Updates

Equity Volatility

Significant volatility in stock price driven by macroeconomic factors, not reflecting the full value of opportunities.

Regulatory Challenges

Delays in clarity from FERC on behind-the-meter configurations and the need for faster interconnection processes.

Market Overestimation

Concerns about utilities and stakeholders overstating demand growth, potentially leading to unnecessary investments.

Company Guidance

During the Constellation Energy Corporation's first quarter earnings call for fiscal year 2025, the company provided guidance indicating a strong operational and financial start. They reported GAAP earnings of $0.38 per share and adjusted operating earnings of $2.14 per share. Constellation reaffirmed their full-year operating EPS guidance range of $8.90 to $9.60 per share. The company highlighted its strategic focus on supporting data center developments by leveraging its clean and reliable energy assets, emphasizing the economic advantage of nuclear energy in the current market environment. Additionally, Constellation discussed the favorable market conditions and its ongoing progress with customer agreements, while addressing the cost dynamics of new energy entry and the importance of the Calpine acquisition. The company also noted the inflation-adjusted benefits of the nuclear PTC in their business model, projecting an incremental $500 million in revenues to base earnings for 2028.

Constellation Energy Corporation Financial Statement Overview

Summary

Constellation Energy Corporation exhibits a strong gross profit margin and equity base, but faces issues with revenue volatility, high debt levels, and negative cash flows. The company must address operational efficiencies and leverage management for long-term stability.

Income Statement

Neutral

The company's revenue has fluctuated over the years, with a notable decline from 2023 to 2024. The gross profit margin improved significantly in 2024, indicating better cost management or product mix. However, net profit and EBIT margins remain volatile, highlighting challenges in maintaining consistent profitability.

Balance Sheet

Neutral

The balance sheet shows a strong equity position relative to total assets, but the high debt levels result in a concerning debt-to-equity ratio. The company's equity ratio has been relatively stable, suggesting a steady asset base, yet the high leverage could pose financial risks if not managed properly.

Cash Flow

Neutral

Operating cash flow has been negative in recent years, indicating potential difficulties in sustaining operations without external financing. Free cash flow remains negative, suggesting continued capital investments or operational inefficiencies. However, the company has shown some ability to generate positive investing cash flow, which might support future growth.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
23.57B	24.92B	24.44B	19.65B	17.60B
	Gross Profit
5.99B	3.23B	2.14B	2.93B	2.85B
	EBIT
4.35B	1.61B	-292.00M	-177.00M	1.18B
	EBITDA
7.72B	4.25B	2.14B	4.99B	4.83B
	Net Income Common Stockholders
3.75B	1.62B	-154.00M	-73.00M	589.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.02B	368.00M	422.00M	504.00M	226.00M
	Total Assets
52.93B	50.76B	46.91B	48.09B	48.09B
	Total Debt
8.41B	9.26B	5.77B	8.20B	7.21B
	Net Debt
5.39B	8.89B	5.35B	7.69B	6.99B
	Total Liabilities
39.39B	39.47B	35.54B	36.47B	33.42B
	Stockholders Equity
13.17B	10.93B	11.02B	11.22B	12.40B
Cash Flow		Free Cash Flow
-5.03B	-7.72B	-4.04B	-2.67B	-1.16B
	Operating Cash Flow
-2.46B	-5.30B	-2.35B	-1.34B	584.00M
	Investing Cash Flow
7.43B	3.03B	3.10B	3.28B	1.96B
	Financing Cash Flow
-2.29B	2.20B	-799.00M	-1.70B	-2.66B

Constellation Energy Corporation Technical Analysis

Technical Analysis Sentiment

Positive

Last Price299.54

Price Trends

50DMA

246.16

Positive

100DMA

259.54

Positive

200DMA

247.84

Positive

Market Momentum

MACD

15.46

Positive

RSI

54.91

Neutral

STOCH

26.83

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CEG, the sentiment is Positive. The current price of 299.54 is above the 20-day moving average (MA) of 294.26, above the 50-day MA of 246.16, and above the 200-day MA of 247.84, indicating a neutral trend. The MACD of 15.46 indicates Positive momentum. The RSI at 54.91 is Neutral, neither overbought nor oversold. The STOCH value of 26.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CEG.

Constellation Energy Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEV	75 Outperform	$134.55B	70.35	22.02%	0.10%	5.99%	―
CEG	75 Outperform	$98.11B	33.00	24.71%	0.49%	11.36%	26.54%
CWEN	72 Outperform	$6.16B	38.53	4.70%	5.63%	-1.34%	21.62%
ORA	69 Neutral	$4.56B	36.41	5.21%	0.65%	1.95%	-6.57%
CWEN.A	68 Neutral	$6.16B	35.97	4.70%	6.01%	-1.34%	21.62%
Sector *	64 Neutral	$8.53B	10.25	4.70%	4.38%	4.14%	-13.04%
BEPC	56 Neutral	$5.48B	32.67	-4.65%	4.94%	1.01%	-110.78%

* Utilities Sector Average

Performance Comparison

CEG

Constellation Energy Corporation

289.88

88.62

44.03%

ORA

Ormat Techno

75.12

0.40

0.54%

CWEN

Clearway Energy

30.28

4.14

15.84%

CWEN.A

Clearway Energy

28.27

4.57

19.28%

BEPC

Brookfield Renewable

29.57

-0.30

-1.00%

GEV

GE Vernova Inc.

484.31

324.24

202.56%

Constellation Energy Corporation Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures

Constellation Energy Reports Q1 2025 Financial Results

Positive

May 6, 2025

On May 6, 2025, Constellation Energy Corporation announced its first-quarter financial results for 2025, reporting a GAAP net income of $0.38 per share and adjusted operating earnings of $2.14 per share. The company reaffirmed its full-year earnings guidance and highlighted the progress on its acquisition of Calpine, expected to close by the end of the year. The Crane Clean Energy Center was selected for fast-track interconnection, enhancing Constellation’s capacity to provide clean energy. These developments underscore Constellation’s strategic positioning in the energy market, emphasizing its role in meeting the growing demand for clean energy and supporting technological advancements in AI.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.