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Talen Energy Corp (TLN)
NASDAQ:TLN
US Market

Talen Energy Corp (TLN) AI Stock Analysis

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Talen Energy Corp

(NASDAQ:TLN)

Rating:64Neutral
Price Target:
$278.00
▲(7.53%Upside)
Talen Energy's overall score reflects strong earnings call performance and bullish technical indicators, which are balanced by financial stability concerns and high valuation. The company's profitability and strategic initiatives are positive, but high leverage and cash flow challenges present risks.
Positive Factors
Earnings Guidance
Improved conviction on 25 and 26 outlook on the back of higher hedges, solid 1Q, and favorable market dynamics since guidance was introduced.
Operational Efficiency
Very strong operational track record at the Susquehanna Nuclear plant, consistently ranking in the top decile among peers on its cost structure, with no forced outages for one unit over the last three years.
Strategic Partnerships
Talen Energy is unique in its existing relationship with Amazon, being the only independent power producer to contract an existing nuclear plant.
Negative Factors
Investor Sentiment
Investors have soured on the nuclear-data center thematic, indicating challenges in the broader market perception.
Market Competition
The outlook for merchant nuclear has been impaired with increasing competition and uncertainty in securing high-value contracts.
Regulatory Challenges
FERC reaffirmed its original rejection of Talen's proposal to expand the Amazon data center at its Susquehanna nuclear plant.

Talen Energy Corp (TLN) vs. SPDR S&P 500 ETF (SPY)

Talen Energy Corp Business Overview & Revenue Model

Company DescriptionTalen Energy Corp (TLN) is a privately held independent power producer headquartered in the United States. The company operates a diverse portfolio of power generation assets, including nuclear, coal, natural gas, and renewable energy facilities. Talen Energy is committed to delivering reliable energy solutions while transitioning towards cleaner and more sustainable energy sources.
How the Company Makes MoneyTalen Energy Corp generates revenue primarily through the sale of electricity generated from its various power plants. The company sells electricity to wholesale markets, utilities, and large industrial customers. Talen Energy's revenue streams are influenced by factors such as electricity market prices, fuel costs, and regulatory environments. The company also engages in energy trading and management services, which contribute additional revenue. As part of its strategic initiatives, Talen Energy is investing in renewable energy and energy storage projects to enhance its revenue potential and align with industry trends towards sustainability.

Talen Energy Corp Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 11.77%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant share buybacks and operational achievements such as AWS campus electrification. However, challenges like the extended outage at Susquehanna and market skepticism about data center demand and tariff impacts present concerns.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Talen Energy Corporation reported $200 million of EBITDA and $87 million of free cash flow, surpassing internal estimates and underpinning their 2025 guidance.
Share Repurchase Program
The company executed $83 million in share buybacks during Q1 2025, and since 2024, has repurchased 14 million shares, representing 23% of outstanding shares.
AWS Campus Electrification
The AWS campus has been electrified, and Talen Energy is delivering power and receiving revenues under the existing contract, with plans to ramp up to 120 megawatts over the year.
Increased Generation and Safety
Fossil fleet generation increased by approximately 20% compared to the previous year, and the company maintained a low recordable incident rate of 0.4.
Adjusted Guidance
Talen Energy narrowed and reaffirmed its 2025 guidance ranges for adjusted EBITDA ($975 million to $1.125 billion) and adjusted free cash flow ($450 million to $540 million).
Negative Updates
Extended Outage at Susquehanna Unit 2
The refueling outage for Susquehanna Unit 2 was extended by over three weeks due to additional maintenance needs, incurring an incremental cost of approximately $20 million.
Market Skepticism
Concerns were raised about data center rebalancing and the lack of strength in power forwards, leading to skepticism about the underlying thesis in the IPP space.
Impact of Tariffs and Trade Restrictions
Market uncertainty due to trade restrictions and tariffs poses long-term cost considerations, although they are not currently having a material effect.
Company Guidance
During Talen Energy Corporation's First Quarter 2025 Earnings Call, the company provided guidance for the year. The results for Q1 showed strong performance, with $200 million in EBITDA and $87 million in free cash flow, which exceeded their internal estimates. This led to a narrowing and reaffirmation of their 2025 guidance, with adjusted EBITDA now expected to be between $975 million and $1.125 billion and adjusted free cash flow projected to be between $450 million and $540 million. The company continued its share repurchase program, buying back $83 million worth of shares during the quarter. Additionally, Talen Energy emphasized its strategic focus on operational excellence, commercialization of megawatts, and expanding contracts, particularly with AWS at the Susquehanna site. The ongoing maintenance at Susquehanna Unit 2 is expected to restore over 27 megawatts, with an estimated payback period of one and a half years based on current market prices. The 2026 outlook remains unchanged, reflecting Talen's confidence in the tightening power market and increased demand, particularly from data centers.

Talen Energy Corp Financial Statement Overview

Summary
Talen Energy Corp's financial performance shows strong profitability margins but is hindered by declining revenue and negative cash flow growth. High leverage and a low equity ratio pose financial risks, although the company demonstrates effective equity capital utilization with a strong return on equity.
Income Statement
55
Neutral
The company's income statement reveals mixed results. The gross profit margin for TTM is approximately 33.7%, indicating strong efficiency in converting revenue into profit. However, the net profit margin is much higher at 31.2%, reflecting substantial net income. Revenue has decreased from the previous year, creating a negative growth trend, although the EBIT margin of 5.6% suggests some operational profitability. EBITDA margin remains robust at 64.3%, indicative of strong earnings before non-cash expenses.
Balance Sheet
45
Neutral
The balance sheet shows a moderate level of financial stability. The debt-to-equity ratio is 2.54, indicating a high level of leverage which could pose financial risks if not managed properly. The return on equity is strong at 48.2% for TTM, suggesting effective use of equity capital to generate profits. However, the equity ratio is relatively low at 20.1%, which points to a reliance on debt financing.
Cash Flow
50
Neutral
Cash flow analysis indicates challenges with growth and earnings conversion. The free cash flow growth rate is negative, showing a significant decline compared to the previous year. The operating cash flow to net income ratio is low at 0.35, suggesting that net income does not closely translate into cash flow. The free cash flow to net income ratio is also low at 0.03, indicating limited free cash generation relative to net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021
Income StatementTotal Revenue
1.82B2.07B1.44B3.02B1.77B
Gross Profit
614.00M664.00M453.00M1.34B244.00M
EBIT
102.00M226.00M-401.00M588.00M-1.10B
EBITDA
1.17B1.77B1.71B1.20B-301.00M
Net Income Common Stockholders
569.00M998.00M613.00M-1.29B-977.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
295.00M328.00M901.00M988.00M276.00M
Total Assets
5.87B6.11B7.12B10.72B10.05B
Total Debt
2.99B3.00B2.82B4.35B4.74B
Net Debt
2.70B2.68B2.42B3.36B4.47B
Total Liabilities
4.68B4.72B4.59B11.20B9.32B
Stockholders Equity
1.18B1.39B2.46B-573.00M733.00M
Cash FlowFree Cash Flow
15.00M67.00M516.00M-125.00M-518.00M
Operating Cash Flow
202.00M256.00M864.00M187.00M-294.00M
Investing Cash Flow
838.00M1.17B-347.00M-368.00M-280.00M
Financing Cash Flow
-1.80B-1.96B-604.00M426.00M956.00M

Talen Energy Corp Technical Analysis

Technical Analysis Sentiment
Positive
Last Price258.54
Price Trends
50DMA
222.53
Positive
100DMA
220.13
Positive
200DMA
203.47
Positive
Market Momentum
MACD
9.30
Negative
RSI
67.11
Neutral
STOCH
70.10
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 258.54 is above the 20-day moving average (MA) of 246.24, above the 50-day MA of 222.53, and above the 200-day MA of 203.47, indicating a bullish trend. The MACD of 9.30 indicates Negative momentum. The RSI at 67.11 is Neutral, neither overbought nor oversold. The STOCH value of 70.10 is Neutral, 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 38 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VSVST
77
Outperform
$58.91B27.2346.29%0.51%49.22%313.49%
HTHTO
72
Outperform
$1.75B17.207.49%3.20%12.34%11.78%
71
Outperform
$1.90B18.795.84%2.86%-9.99%-73.66%
NRNRG
71
Outperform
$30.49B24.5644.91%1.09%2.57%-10.19%
64
Neutral
$8.53B10.344.24%4.37%4.14%-13.04%
TLTLN
64
Neutral
$1.80B26.7929.32%68.95%-34.72%
HEHE
49
Neutral
$1.80B-67.93%-7.58%-819.97%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TLN
Talen Energy Corp
257.02
141.65
122.78%
HE
Hawaiian Electric
10.42
0.14
1.36%
NRG
NRG Energy
155.05
75.15
94.06%
HTO
H2O America
52.57
1.58
3.10%
VST
Vistra Energy
169.37
78.90
87.21%
CEPU
Central Puerto SA
12.15
3.41
39.02%

Talen Energy Corp Corporate Events

Business Operations and Strategy
Talen Energy Extends Maintenance at Susquehanna Station
Neutral
May 19, 2025

On May 19, 2025, Talen Energy Corp announced an update regarding the maintenance outage at its Susquehanna Steam Electric Station. The planned refueling outage on Unit 2, which began in late March, was extended due to additional maintenance needs, increasing costs by $35 million. The completion of maintenance is expected by the first week of June, with efficiency gains anticipated to offset costs within two years. Despite the delay, the company’s financial guidance for 2025 remains unchanged.

The most recent analyst rating on (TLN) stock is a Buy with a $233.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Talen Energy Corp Approves 2025 Employee Stock Plan
Neutral
May 12, 2025

On May 7, 2025, Talen Energy Corporation held its Annual Meeting of Stockholders, where several proposals were approved, including the 2025 Employee Stock Purchase Plan (ESPP), which allows employees to buy company stock at a 15% discount. Additionally, the election of directors, executive compensation, and the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025 were ratified, impacting the company’s governance and financial oversight.

The most recent analyst rating on (TLN) stock is a Buy with a $233.00 price target. To see the full list of analyst forecasts on Talen Energy Corp stock, see the TLN Stock Forecast page.

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.