Talen Energy Corp (TLN) AI Stock Analysis

• Market Cap: $17.14B
• Dividend Yield: N/A
• Average Volume (3M): 885.05K
• Price to Earnings (P/E): 85.0
• 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): -7.60
• Shares Outstanding: 45,687,828
• 10 Day Avg. Volume: 591,113
• 30 Day Avg. Volume: 885,046
• PEG Ratio: 0.62
• Price to Book (P/B): 15.67
• Price to Sales (P/S): 6.64
• P/FCF Ratio: 24.33
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 11.02
• Enterprise Value/Gross Profit: 31.93
• Enterprise Value/Ebitda: 42.71
• 1Y Price Target: $461.80
• Price Target Upside: 18.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 21.17
• Revenue Forecast (FY): $4.21B

• Rating: 55 Neutral
• Price Target: $400.00 ▲(2.55% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is held back primarily by volatile profitability and a sharply more leveraged balance sheet, despite strong recent operating/free cash flow. Technically the stock shows solid upward trend and positive momentum, but valuation is stretched (high P/E with no dividend), and the earnings call balanced reaffirmed guidance and financing progress against outage and regulatory delay risks.

Positive Factors

Cash Generation

A ~ $704M operating/free cash flow result in 2025 demonstrates the company's ability to convert generation operations into substantial cash even amid reported net losses. Durable cash generation provides capacity to fund capex, service liabilities, and support strategic transactions over the next several quarters, improving financial optionality despite historical inconsistency.

Financing & Liquidity

Completion of sizeable unsecured and secured financings materially extends liquidity and reduces near-term refinancing risk. This durable financing backbone supports planned acquisitions and growth investments, gives management time to execute deleveraging, and cushions the business against market dislocations during integration periods.

Strategic Asset Expansion

The planned acquisition of ~2.6GW of efficient combined-cycle assets expands Talen’s PJM footprint, roughly doubles expected generation, and is forecast to be accretive to adjusted free cash flow and drive rapid deleveraging. This structural increase in scale and more efficient gas exposure strengthens ability to serve growing data-center and large-load demand over the medium term.

Negative Factors

High Leverage

A jump to about $6.8B of total debt and a ~6.2x debt-to-equity ratio leaves the balance sheet highly leveraged. Elevated leverage increases interest expense and covenant sensitivity, limits strategic flexibility, and heightens vulnerability to commodity price swings or operational shocks during the multi-quarter integration and deleveraging period.

Earnings Volatility

Multi-year swings between large profits and losses, culminating in a negative EBITDA margin and net loss in 2025, show that earnings depend heavily on market prices, outage timing, and fuel spreads. This undermines predictability of cash flows and complicates planning for debt repayment and sustained investment over the next several quarters.

Operational & Regulatory Execution Risk

An HSR refiling that may push Freedom and Guernsey closures into Q1 2026, combined with elevated forced outages noted in the period, raises execution risk. Delays and operational downtime can postpone expected cashflow synergies and prolong the high-leverage window, making near-term deleveraging and integration outcomes less certain.

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

Earnings quality is weak due to sharp profit/loss swings (net loss and negative EBITDA margin in 2025 after strong 2024), and balance-sheet risk is elevated with much higher leverage (debt rising to ~$6.8B and ~6.2x debt-to-equity). Offsetting this somewhat, 2025 operating/free cash flow rebounded strongly (~$704M), indicating meaningful cash generation despite reported losses.

Income Statement

Results are highly volatile. Revenue grew ~10% in 2025, but profitability swung sharply from strong earnings in 2024 (very high net margin) to a net loss in 2025 with negative EBITDA margin. The multi-year pattern shows alternating profit and loss years (large losses in 2021–2022, strong profits in 2023–2024, then weakness again in 2025), which reduces confidence in earnings durability.

Balance Sheet

Leverage increased meaningfully: total debt rose to ~$6.8B in 2025 from ~$3.0B in 2024, pushing debt-to-equity to ~6.2x. Equity is positive in 2025, but the capital structure has shown strain historically (including negative equity in 2022). The combination of high leverage and a return to net losses in 2025 elevates balance-sheet risk.

Cash Flow

Cash generation is a relative bright spot. Operating cash flow improved to ~$704M in 2025 (and free cash flow also ~$704M), a major rebound versus 2024 free cash flow (~$54M). Cash flow has been inconsistent over time (negative in 2021 and negative free cash flow in 2022), and 2025 operating cash flow covered only ~0.67x of reported earnings-related obligations in the provided coverage metric, but overall cash conversion in 2025 is strong despite net losses.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.58B	2.07B	2.44B	2.41B	1.77B
Gross Profit	0.00	664.00M	1.05B	770.00M	244.00M
EBITDA	-853.00M	1.77B	977.00M	-326.00M	-301.00M
Net Income	-219.00M	998.00M	613.00M	-1.29B	-977.00M
Balance Sheet
Total Assets	10.90B	6.11B	7.12B	10.72B	10.05B
Cash, Cash Equivalents and Short-Term Investments	752.00M	329.00M	400.00M	988.00M	276.00M
Total Debt	6.81B	3.00B	2.82B	4.35B	4.74B
Total Liabilities	9.81B	4.72B	4.59B	11.20B	9.32B
Stockholders Equity	1.09B	1.39B	2.46B	-573.00M	733.00M
Cash Flow
Free Cash Flow	704.00M	54.00M	516.00M	-125.00M	-518.00M
Operating Cash Flow	704.00M	243.00M	864.00M	187.00M	-294.00M
Investing Cash Flow	-4.00B	1.05B	-347.00M	-368.00M	-280.00M
Financing Cash Flow	0.00	-1.82B	-604.00M	426.00M	956.00M

Talen Energy Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 390.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 390.05 is above the 20-day moving average (MA) of 362.28, above the 50-day MA of 369.77, and above the 200-day MA of 354.51, indicating a bullish trend. The MACD of 5.72 indicates Negative momentum. The RSI at 58.15 is Neutral, neither overbought nor oversold. The STOCH value of 85.95 is Negative, 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	69 Neutral	$6.18B	19.35	7.72%	4.38%	7.53%	-17.59%
PPL	67 Neutral	$28.64B	24.03	8.15%	3.13%	8.42%	32.48%
NRG	66 Neutral	$35.27B	45.89	41.55%	1.11%	6.40%	62.12%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
PNW	64 Neutral	$11.98B	20.54	8.62%	4.15%	5.70%	-8.25%
VST	62 Neutral	$58.15B	61.31	21.63%	0.56%	42.77%	-47.64%
TLN	55 Neutral	$17.14B	85.03	11.72%	―	80.20%	-74.33%

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.