Talen Energy Corp (TLN)
NASDAQ:TLN
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Talen Energy Corp
(NASDAQ:TLN)
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Rating:58Neutral
Price Target:
$358.00
▼(-2.01% Downside)
Action:Reiterated
Date:05/22/26
The score reflects strong earnings-call outlook and improved free-cash-flow generation, partially offset by high balance-sheet leverage and inconsistent bottom-line profitability. Technical signals are mixed-to-weak and valuation (high P/E with no dividend yield provided) further caps the score.
Positive Factors
Improved cash generation
TTM operating cash flow near $1.0B and FCF ~ $0.9B with ~58% FCF growth marks a durable step-up in cash conversion versus prior years. Sustained free cash flow materially strengthens the company’s ability to service debt, fund capex, pursue M&A, and support buybacks, reducing structural liquidity risk if maintained.
Negative Factors
High leverage
Very elevated leverage (debt roughly six times equity) is a persistent structural constraint: it increases refinancing and covenant risk, elevates interest burden sensitivity to rate moves, and restricts strategic optionality. Even with improved cash flow, sustained deleveraging is required to restore durable balance-sheet flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved cash generation
TTM operating cash flow near $1.0B and FCF ~ $0.9B with ~58% FCF growth marks a durable step-up in cash conversion versus prior years. Sustained free cash flow materially strengthens the company’s ability to service debt, fund capex, pursue M&A, and support buybacks, reducing structural liquidity risk if maintained.
Read all positive factors
Talen Energy Corp (TLN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.24B
Dividend YieldN/A
Average Volume (3M)723.99K
Price to Earnings (P/E)―
Beta (1Y)1.56
Revenue Growth84.38%
EPS Growth-104.50%
CountryUS
Employees1,894
SectorUtilities
Sector Strength65
IndustryIndependent Power Producers
Share Statistics
EPS (TTM)-0.46
Shares Outstanding45,395,008
10 Day Avg. Volume868,778
30 Day Avg. Volume723,993
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)15.67
Price to Sales (P/S)6.78
P/FCF Ratio41.88
Enterprise Value/Market Cap1.35
Enterprise Value/Revenue4.94
Enterprise Value/Gross Profit8.34
Enterprise Value/Ebitda10.90
Forecast
1Y Price Target
$463.43Price Target Upside26.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)22.22
Revenue Forecast (FY)$4.38B
Talen Energy Corp Business Overview & Revenue Model
Company Description
Talen Energy Corporation, an independent power producer and infrastructure company, produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States. The company operates nuclear, fossil, solar, an...
How the Company Makes Money
Talen Energy primarily makes money by generating electricity and selling it into competitive wholesale power markets. Its revenue model is driven by (1) energy sales: selling electricity based on market-clearing prices in the regions where its pla...
Talen Energy Corp Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call communicated multiple strong positives: large year-over-year increases in adjusted EBITDA and free cash flow, tightened leverage (3.1x vs 3.5x target), successful financing actions that reduce interest expense and improve liquidity, a constructive 2027–2028 outlook with meaningful per-share upside and an active share repurchase plan, and a sizable development pipeline with growing spark spreads and data-center demand supporting merchant and contracted revenue upside. Risks discussed include pending regulatory approvals for Cornerstone, zonal basis volatility (PPL vs West Hub), high new-build costs that require PPAs or RVP support, interconnection queue uncertainty, and expected project rationalization in 2026. Overall, the positives—financial strength, accretive M&A, improved financing, strong operational and safety results, and clear upside levers—outweigh the operational and market uncertainties noted.Positive Updates
Strong Quarterly Financial Performance
Q1 adjusted EBITDA of $473 million and adjusted free cash flow of $350 million; adjusted EBITDA more than doubled year-over-year and adjusted free cash flow quadrupled year-over-year following the Freedom and Guernsey acquisitions.
Negative Updates
Pending Regulatory Approvals for Cornerstone
Cornerstone acquisition still contingent on regulatory approvals (FERC filing pending approval expected by summer and Indiana unopposed final order anticipated); results and timing could affect 2026 updates until close.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Quarterly Financial Performance
Q1 adjusted EBITDA of $473 million and adjusted free cash flow of $350 million; adjusted EBITDA more than doubled year-over-year and adjusted free cash flow quadrupled year-over-year following the Freedom and Guernsey acquisitions.
Read all positive updates
Company Guidance
Talen reaffirmed 2026 guidance of adjusted EBITDA $1.75–$2.05 billion and adjusted free cash flow $980 million–$1.18 billion (ex-Cornerstone) after reporting Q1 adj. EBITDA $473 million and adj. free cash flow $350 million; forecasted 2026 net leverage is 3.1x (target <3.5x) and Cornerstone close expected this summer once approvals are received. The company pre-funded Cornerstone with $4.0 billion of senior unsecured notes at a blended rate just above 6.25%, retired $1.2 billion of 8.625% secured notes (saving >$40 million/year and ~+$1 free cash flow per share), and cut secured debt mix from ~60% to ~30%. Preliminary 2027/2028 outlook (including Cornerstone) targets roughly $34/share FCF in 2027 and $36/share in 2028 (+15% vs. January), or ~ $41/share in 2028 assuming 70% FCF is used to repurchase shares (30% improvement vs. January) implying ~11% FCF yield; liquidity facilities to be upsized to $1.35B revolver and $1.5B LOC (LCF maturity extended to Dec 2029).Talen Energy Corp Financial Statement Overview
Summary
Income Statement
55
Neutral
Balance Sheet
32
Negative
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.70B | 2.52B | 2.07B | 2.44B | 2.41B | 1.77B |
| Gross Profit | 2.78B | 1.25B | 664.00M | 1.05B | 770.00M | 244.00M |
| EBITDA | 2.13B | 415.00M | 1.77B | 977.00M | -326.00M | -301.00M |
| Net Income | -21.00M | -219.00M | 998.00M | 613.00M | -1.29B | -977.00M |
Balance Sheet | ||||||
| Total Assets | 10.99B | 10.90B | 6.11B | 7.12B | 10.72B | 10.05B |
| Cash, Cash Equivalents and Short-Term Investments | 1.03B | 752.00M | 329.00M | 400.00M | 988.00M | 276.00M |
| Total Debt | 6.81B | 6.81B | 3.00B | 2.82B | 4.35B | 4.74B |
| Total Liabilities | 9.92B | 9.81B | 4.72B | 4.59B | 11.20B | 9.32B |
| Stockholders Equity | 1.07B | 1.09B | 1.39B | 2.46B | -573.00M | 733.00M |
Cash Flow | ||||||
| Free Cash Flow | 916.00M | 409.00M | 54.00M | 516.00M | -125.00M | -518.00M |
| Operating Cash Flow | 1.03B | 615.00M | 243.00M | 864.00M | 187.00M | -294.00M |
| Investing Cash Flow | -4.01B | -4.00B | 1.05B | -347.00M | -368.00M | -280.00M |
| Financing Cash Flow | 3.69B | 3.77B | -1.82B | -604.00M | 426.00M | 956.00M |
Talen Energy Corp Technical Analysis
Positive
365.35
Price Trends
348.27
Positive
353.26
Positive
371.60
Positive
Market Momentum
4.88
Negative
56.81
Neutral
86.85
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLN, the sentiment is Positive. The current price of 365.35 is below the 20-day moving average (MA) of 368.18, above the 50-day MA of 348.27, and below the 200-day MA of 371.60, indicating a bullish trend. The MACD of 4.88 indicates Negative momentum. The RSI at 56.81 is Neutral, neither overbought nor oversold. The STOCH value of 86.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TLN.
Talen Energy Corp Risk Analysis
Talen Energy Corp disclosed 41 risk factors in its most recent earnings report. Talen Energy Corp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Talen Energy Corp Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
63 Neutral | $54.00B | 24.30 | 43.22% | 0.56% | -24.36% | -6.91% | |
61 Neutral | $26.96B | 21.79 | 8.32% | 3.13% | 7.52% | 21.81% | |
60 Neutral | $12.46B | 18.71 | 9.34% | 4.15% | 4.84% | 5.77% | |
60 Neutral | $5.92B | 22.30 | 6.25% | 4.38% | 4.28% | -21.65% | |
58 Neutral | $17.24B | -828.55 | -1.72% | ― | 84.38% | -104.50% | |
46 Neutral | $29.12B | 119.09 | 8.84% | 1.11% | 10.82% | -86.75% |
* Utilities Sector Average
TLN
Talen Energy Corp
381.47
136.78
55.90%
NRG
NRG Energy
137.50
-15.22
-9.97%
PNW
Pinnacle West Capital
100.85
13.47
15.42%
POR
Portland GE
50.67
10.05
24.74%
PPL
PPL
35.33
1.97
5.91%
VST
Vistra Corp
160.28
1.36
0.86%
Talen Energy Corp Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Talen Energy Reprices and Extends Key Credit Facilities
Positive
May 22, 2026
On May 20, 2026, Talen Energy Supply amended its credit agreement to reprice its $846 million senior secured term loan B due 2030, extend its maturity to November 2032, reprice its $839 million term loan B due 2031, and reprice its $900 million re...
Executive/Board ChangesShareholder Meetings
Talen Energy Shareholders Affirm Board, Executive Pay, Auditor
Positive
May 7, 2026
At its 2026 Annual Meeting of Stockholders held on May 5, 2026, Talen Energy shareholders elected seven directors, including Stephen Schaefer and Mark “Mac” McFarland, to serve until the 2027 annual meeting, reinforcing continuity in t...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Talen Energy Prices $4 Billion Senior Notes Offering
Positive
Apr 17, 2026
On April 17, 2026, Talen Energy announced that its subsidiary Talen Energy Supply priced $4 billion of senior notes in a private placement, consisting of $1.5 billion of 6.125% notes due 2031 and $2.5 billion of 6.375% notes due 2033, with closing...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.