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Constellation Energy Corporation (CEG)
NASDAQ:CEG

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)

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
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
55
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
60
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
45
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
23.57B24.92B24.44B19.65B17.60B
Gross Profit
5.99B3.23B2.14B2.93B2.85B
EBIT
4.35B1.61B-292.00M-177.00M1.18B
EBITDA
7.72B4.25B2.14B4.99B4.83B
Net Income Common Stockholders
3.75B1.62B-154.00M-73.00M589.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.02B368.00M422.00M504.00M226.00M
Total Assets
52.93B50.76B46.91B48.09B48.09B
Total Debt
8.41B9.26B5.77B8.20B7.21B
Net Debt
5.39B8.89B5.35B7.69B6.99B
Total Liabilities
39.39B39.47B35.54B36.47B33.42B
Stockholders Equity
13.17B10.93B11.02B11.22B12.40B
Cash FlowFree Cash Flow
-5.03B-7.72B-4.04B-2.67B-1.16B
Operating Cash Flow
-2.46B-5.30B-2.35B-1.34B584.00M
Investing Cash Flow
7.43B3.03B3.10B3.28B1.96B
Financing Cash Flow
-2.29B2.20B-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
GEGEV
75
Outperform
$134.55B70.3522.02%0.10%5.99%
CECEG
75
Outperform
$98.11B33.0024.71%0.49%11.36%26.54%
72
Outperform
$6.16B38.534.70%5.63%-1.34%21.62%
ORORA
69
Neutral
$4.56B36.415.21%0.65%1.95%-6.57%
68
Neutral
$6.16B35.974.70%6.01%-1.34%21.62%
64
Neutral
$8.53B10.254.70%4.38%4.14%-13.04%
56
Neutral
$5.48B32.67-4.65%4.94%1.01%-110.78%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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.