Talen Energy Corp (TLN) AI Stock Analysis

• Market Cap: $17.13B
• Dividend Yield: N/A
• Average Volume (3M): 783.15K
• Price to Earnings (P/E): 91.0
• Beta (1Y): 1.54
• Revenue Growth: 80.20%
• EPS Growth: -74.33%
• Country: US
• Employees: 1,894
• Sector: Utilities
• Sector Strength: 65
• Industry: Independent Power Producers
• EPS (TTM): 4.25
• Shares Outstanding: 45,687,828
• 10 Day Avg. Volume: 686,493
• 30 Day Avg. Volume: 783,153
• PEG Ratio: 0.14
• Price to Book (P/B): 7.88
• Price to Sales (P/S): 5.27
• P/FCF Ratio: 163.14
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 9.88
• Enterprise Value/Gross Profit: 29.31
• Enterprise Value/Ebitda: 28.31
• 1Y Price Target: $458.22
• Price Target Upside: 9.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 20.53
• Revenue Forecast (FY): $4.09B

• Rating: 59 Neutral
• Price Target: $438.00 ▲(4.52% Upside)

The score is held back primarily by weak free cash flow and cash conversion despite solid revenue growth and margins. Technicals are notably strong and corporate updates are positive, but the very high P/E and some execution/regulatory risks from the earnings call temper the overall outlook.

Positive Factors

Revenue and Margins

Double-digit revenue growth alongside robust gross and EBITDA margins signals durable operational strength in generation and commercial optimization. This margin profile supports steady internal earnings power across merchant and contracted sales, underpinning multi-quarter profitability resilience.

Low Leverage & Liquidity

Very low leverage combined with substantial available liquidity gives Talen flexibility to fund acquisitions, invest in reliability capex, and absorb merchant-price volatility without immediate refinancing pressure, supporting strategic execution over several quarters.

Scale Expansion & FCF Accretion

The 2.6GW gas-asset acquisition and prior fleet adds materially increase efficient baseload capacity and western PJM presence, boosting scale and diversification. Management projects meaningful FCF accretion and high unlevered conversion, which can structurally strengthen cash generation and market presence.

Negative Factors

Weak Free Cash Flow Conversion

Severely negative FCF growth and poor OCF-to-income conversion indicate earnings are not converting to durable cash. That forces reliance on external financing for capex and acquisitions, raising execution risk and constraining sustainable reinvestment or shareholder return over multiple quarters.

Operational Reliability Risk

Elevated forced outages reduce available generation and capacity performance, directly cutting energy and capacity revenue while increasing maintenance spend. Persistent reliability issues can erode contract credibility with large customers and impair long-term margin sustainability in wholesale markets.

Regulatory & Execution Uncertainty

Ongoing regulatory reviews and refiled HSR increase timing and approval risk for major acquisitions. Delays can defer forecasted FCF accretion, raise financing costs, and complicate integration, undermining near-term deleveraging targets and the strategic plan's expected benefits over the next several quarters.

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, and coal power plants. It is also developing battery storage projects. The company owns and operates approximately 10.7 GW of power infrastructure. Talen Energy Corporation is headquartered in Houston, Texas.

How the Company Makes Money

Talen Energy Corp generates revenue primarily through the sale of electricity produced from its power generation facilities. The company's revenue model includes several key streams: (1) wholesale electricity sales to regional power markets, where it participates in bidding for power generation; (2) long-term power purchase agreements (PPAs) with utilities and other off-takers, providing stable cash flow; (3) ancillary services, including capacity and reserve market participation, which ensures reliability for the grid; and (4) revenues from renewable energy credits (RECs) and environmental credits, which are generated through its commitment to sustainable practices. Talen Energy may also engage in strategic partnerships and joint ventures to enhance its market reach and operational capabilities, contributing to its overall earnings.

Talen Energy Corp Financial Statement Overview

Summary

Talen Energy Corp shows strong revenue growth and operational efficiency. However, the balance sheet reveals moderate profitability and a need for improved asset utilization. The cash flow statement indicates significant challenges in generating free cash flow, impacting financial flexibility.

Income Statement

Talen Energy Corp shows a positive revenue growth rate of 10.1% TTM, indicating a strong upward trajectory. The gross profit margin of 42.9% TTM is robust, reflecting effective cost management. However, the net profit margin of 8.1% TTM is relatively low, suggesting room for improvement in profitability. The EBIT margin of 13.7% TTM is moderate, while the EBITDA margin of 29.8% TTM is healthy, indicating good operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is low at 0.01 TTM, indicating low leverage and financial stability. However, the return on equity (ROE) of 12.1% TTM is moderate, suggesting average profitability relative to shareholder equity. The equity ratio of 24.1% TTM indicates a balanced capital structure, but there is room for improvement in asset utilization.

Cash Flow

The free cash flow growth rate is significantly negative at -620.3% TTM, indicating challenges in generating free cash flow. The operating cash flow to net income ratio of 0.09 TTM is low, suggesting limited cash generation from operations. Additionally, the free cash flow to net income ratio of -1.44 TTM highlights inefficiencies in converting net income into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.34B	2.07B	2.44B	2.41B	1.77B
Gross Profit	790.00M	664.00M	1.05B	770.00M	244.00M
EBITDA	818.00M	1.77B	977.00M	-326.00M	-301.00M
Net Income	226.00M	998.00M	613.00M	-1.29B	-977.00M
Balance Sheet
Total Assets	6.10B	6.11B	7.12B	10.72B	10.05B
Cash, Cash Equivalents and Short-Term Investments	497.00M	329.00M	400.00M	988.00M	276.00M
Total Debt	2.99B	3.00B	2.82B	4.35B	4.74B
Total Liabilities	4.63B	4.72B	4.59B	11.20B	9.32B
Stockholders Equity	1.47B	1.39B	2.46B	-573.00M	733.00M
Cash Flow
Free Cash Flow	307.00M	54.00M	516.00M	-125.00M	-518.00M
Operating Cash Flow	414.00M	243.00M	864.00M	187.00M	-294.00M
Investing Cash Flow	-210.00M	1.05B	-347.00M	-368.00M	-280.00M
Financing Cash Flow	-839.00M	-1.82B	-604.00M	426.00M	956.00M

Talen Energy Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 419.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 419.07 is above the 20-day moving average (MA) of 379.21, above the 50-day MA of 375.56, and above the 200-day MA of 332.68, indicating a bullish trend. The MACD of 3.26 indicates Negative momentum. The RSI at 64.19 is Neutral, neither overbought nor oversold. The STOCH value of 60.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TLN.

Talen Energy Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
POR	70 Outperform	$5.54B	17.88	7.99%	4.38%	7.53%	-17.59%
NRG	68 Neutral	$28.71B	21.90	64.19%	1.11%	6.40%	62.12%
PPL	66 Neutral	$26.28B	24.18	7.65%	3.13%	8.42%	32.48%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
PNW	65 Neutral	$11.05B	18.95	8.62%	4.15%	5.70%	-8.25%
TLN	59 Neutral	$17.13B	91.03	11.72%	―	80.20%	-74.33%
VST	59 Neutral	$57.25B	60.36	21.63%	0.56%	42.77%	-47.64%

Talen Energy Corp Corporate Events

Talen Energy to Acquire Gas-Fired Assets in PJM Expansion

On January 15, 2026, Talen Energy agreed to acquire approximately 2.6 gigawatts of natural gas-fired generation from Energy Capital Partners—comprising the Waterford and Darby plants in Ohio and the Lawrenceburg facility in Indiana—for $3.45 billion, funded by about $2.55 billion in cash and roughly $900 million in Talen stock. The assets, which include highly efficient combined-cycle units and a peaking plant with access to low-cost Marcellus and Utica gas supplies, will significantly expand Talen’s western PJM footprint, roughly double its expected annual generation output within two years, and further diversify its fleet following its 2025 Freedom and Guernsey acquisitions. Talen expects the deal, targeted to close in early second-half 2026 subject to regulatory approvals, to be immediately accretive to adjusted free cash flow per share by more than 15% annually through 2030, support rapid deleveraging to a net leverage level of 3.5x or lower by year-end 2026, and enhance its ability to serve growing data center and large-load customers, while making ECP a significant shareholder through equity consideration and aligning the parties’ long-term interests.

The most recent analyst rating on (TLN) stock is a Buy with a $457.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.

Talen Energy Reports Strong PJM Auction Results

On December 17, 2025, Talen Energy reported significant results from the PJM Base Residual Auction for the 2027/2028 planning year. The company cleared 8,745 megawatts at a clearing price of $333.44 per megawatt-day, securing approximately $1,067 million in capacity revenues for the period. This development strengthens Talen’s financial outlook and reinforces its position as a key player within the U.S. wholesale power market while supporting its transition toward powering digital infrastructure industries.

The most recent analyst rating on (TLN) stock is a Buy with a $443.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.

Talen Energy Announces Executive Management Changes

On December 15, 2025, Talen Energy Corporation announced significant changes to its executive management team as part of its strategic realignment. The board extended CEO Mac McFarland’s contract and appointed Terry L. Nutt as President, Cole Muller as CFO, and Brad Berryman as COO, among other leadership updates. These changes are aimed at aligning with the company’s business strategy and ensuring leadership continuity, which is expected to enhance shareholder value and support the company’s growth. The announcement also included details about employment agreements and incentive plans designed to retain key executives and align their interests with the company’s long-term success.

The most recent analyst rating on (TLN) stock is a Buy with a $447.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.

Talen Energy Completes Major Power Station Acquisitions

On November 25, 2025, Talen Energy announced the completion of its acquisitions of the Freedom Generating Station in Pennsylvania and the Guernsey Power Station in Ohio, adding nearly 2.9 gigawatts of natural gas-fired capacity to its portfolio. These acquisitions, funded through various financing transactions, are expected to enhance Talen’s ability to provide reliable energy to large commercial clients and data centers, while maintaining financial discipline. The integration of these assets is anticipated to be seamless, with continued efficient operations under Talen’s management.

The most recent analyst rating on (TLN) stock is a Buy with a $505.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.

Talen Energy Completes $2.69 Billion Senior Notes Offering

On October 27, 2025, Talen Energy Supply, LLC, a subsidiary of Talen Energy Corporation, completed its offerings of $2.69 billion in senior notes, with the proceeds intended to fund the acquisitions of the Freedom Energy Center and the Guernsey Power Station. These acquisitions are part of Talen’s strategy to expand its natural gas-fired power generation capacity, with potential implications for its market positioning and operational scale.

The most recent analyst rating on (TLN) stock is a Hold with a $424.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.