Constellation Energy Corporation (CEG) AI Stock Analysis

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Constellation Energy Corporation

(NASDAQ:CEG)

64Neutral

Constellation Energy Corporation's overall score reflects robust technical momentum and positive corporate events that bolster market confidence. However, financial performance concerns, such as high leverage and negative cash flows, weigh down its score. Valuation is moderate, with a P/E ratio indicating the stock is reasonably priced. The company's strategic moves and sustainability focus are strong positives.

Positive Factors

Earnings Growth

The acquisition of Calpine Corp is seen as a compelling deal for Constellation Energy Corp, offering earnings growth and new strategic opportunities.

Market Position

Constellation Energy Corp is set to emerge as US’s #1 energy producer based on generation output while maintaining the lowest carbon intensity.

Strategic Partnerships

Constellation Energy Corp is strategically located near major data center and manufacturing hubs and benefits from rising power demand, as evidenced by its recent contract win with Microsoft.

Negative Factors

Market Conditions

Extreme weather conditions and a slowdown in data center contracts could impact power prices and cap earnings growth.

Regulatory Challenges

Investors increasingly do not expect a material data center deal from CEG due to regulatory uncertainty and ongoing disputes.

Valuation Concerns

The stock is considered pricey compared to its peers, despite being down from a mid-February peak.

Constellation Energy Corporation (CEG) vs. S&P 500 (SPY)

Market Cap

$77.47B

Dividend Yield0.58%

Average Volume (3M)3.83M

Price to Earnings (P/E)20.8

Beta (1Y)1.74

Revenue Growth6.89%

EPS Growth137.32%

CountryUS

Employees14,215

SectorUtilities

Sector Strength84

IndustryRenewable Utilities

Share Statistics

EPS (TTM)11.89

Shares Outstanding313,309,700

10 Day Avg. Volume2,691,389

30 Day Avg. Volume3,833,297

Financial Highlights & Ratios

PEG Ratio0.15

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.99

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit4.39

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$276.50

Price Target Upside11.83% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering8

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 makes money primarily through the generation and sale of electricity. The company owns and operates a diverse portfolio of power plants, including nuclear, wind, solar, and hydroelectric facilities, which generate electricity sold to residential, commercial, and industrial customers. Revenue is generated through long-term power purchase agreements, retail energy sales, and wholesale market transactions. Additionally, Constellation Energy offers energy management and efficiency solutions to help customers optimize their energy consumption and reduce costs, further contributing to its revenue streams. The company's strategic partnerships and investments in renewable energy projects also play a significant role in its earnings by expanding its capacity to meet the growing demand for clean energy.

Constellation Energy Corporation Key Performance Indicators (KPIs)

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 Corporation's nuclear generation data across all regions, including Mid-Atlantic, Midwest, New York, and ERCOT, remains unavailable or zero, indicating either a lack of reporting or operational activity in these areas. This absence of data could suggest strategic shifts or operational challenges in nuclear generation, but without earnings call insights, the reasons remain unclear. Investors should monitor future disclosures for clarity on the company's nuclear strategy and potential impacts on its energy portfolio.

Data provided by:

Main Street Data

Constellation Energy Corporation Financial Statement Overview

Summary

Constellation Energy Corporation demonstrates strengths in its gross profit margin and equity base but faces challenges with revenue volatility, high debt levels, and negative cash flows. The company needs to focus on improving operational efficiencies and managing its leverage to secure long-term financial health.

Income Statement

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

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

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
23.57B	24.92B	24.44B	19.65B	17.60B
	Gross Profit
17.41B	3.23B	2.14B	2.93B	2.85B
	EBIT
4.35B	1.61B	-292.00M	-177.00M	1.18B
	EBITDA
5.14B	4.25B	2.14B	4.99B	4.83B
	Net Income Common Stockholders
3.75B	1.62B	-154.00M	-73.00M	589.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
109.00M	368.00M	422.00M	504.00M	226.00M
	Total Assets
52.93B	50.76B	46.91B	48.09B	48.09B
	Total Debt
8.41B	9.26B	5.77B	8.20B	7.21B
	Net Debt
8.30B	8.89B	5.35B	7.69B	6.99B
	Total Liabilities
39.39B	39.47B	35.54B	36.47B	33.42B
	Stockholders Equity
13.17B	10.93B	11.02B	11.22B	12.40B
Cash Flow		Free Cash Flow
-5.03B	-7.72B	-4.04B	-2.67B	-1.16B
	Operating Cash Flow
-2.46B	-5.30B	-2.35B	-1.34B	584.00M
	Investing Cash Flow
7.43B	3.03B	3.10B	3.28B	1.96B
	Financing Cash Flow
-2.29B	2.20B	-799.00M	-1.70B	-2.66B

Constellation Energy Corporation Technical Analysis

Technical Analysis Sentiment

Positive

Last Price247.26

Price Trends

50DMA

218.69

Positive

100DMA

248.15

Negative

200DMA

235.61

Positive

Market Momentum

MACD

4.85

Negative

RSI

64.64

Neutral

STOCH

92.62

Negative

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 247.26 is above the 20-day moving average (MA) of 209.84, above the 50-day MA of 218.69, and above the 200-day MA of 235.61, indicating a bullish trend. The MACD of 4.85 indicates Negative momentum. The RSI at 64.64 is Neutral, neither overbought nor oversold. The STOCH value of 92.62 is Negative, 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEV	74 Outperform	$108.17B	56.56	22.02%	0.13%	5.99%	―
CWEN	72 Outperform	$5.74B	38.59	4.70%	5.81%	-1.34%	21.62%
BEPC	71 Outperform	$4.09B	32.67	6.15%	5.09%	-8.26%	―
CWEN.A	68 Neutral	$5.74B	36.16	4.70%	6.24%	-1.34%	21.62%
ORA	66 Neutral	$4.38B	35.48	5.22%	0.67%	6.06%	-2.21%
CEG	64 Neutral	$77.47B	20.78	31.12%	0.58%	6.89%	137.32%
Sector *	63 Neutral	$8.48B	11.84	5.71%	4.35%	3.05%	-11.35%

* Utilities Sector Average

Performance Comparison

CEG

Constellation Energy Corporation

247.26

50.90

25.92%

ORA

Ormat Techno

72.21

5.01

7.46%

CWEN

Clearway Energy

28.78

5.46

23.41%

CWEN.A

Clearway Energy

26.97

5.39

24.98%

BEPC

Brookfield Renewable

28.23

0.01

0.04%

GEV

GE Vernova Inc.

396.32

227.44

134.68%

Constellation Energy Corporation Earnings Call Summary

Earnings Call Date:Feb 18, 2025

(Q3-2024)

% Change Since: -21.93%|

Next Earnings Date:May 06, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Constellation Energy's robust financial performance and operational success, particularly in its nuclear and commercial segments. However, challenges remain in regulatory areas, specifically regarding FERC rulings and capacity market issues. Overall, the positive financial and operational achievements slightly outweigh the regulatory and market challenges.

Q3-2024 Updates

Positive Updates

Strong Financial Performance

Constellation Energy reported GAAP earnings of $3.82 per share and adjusted operating earnings of $2.74 per share, which was $0.61 higher than the previous year. They raised and narrowed their adjusted operating earnings guidance for the full year to $8 to $8.40 per share.

Nuclear Fleet Performance

Nuclear plants produced over 41 million-megawatt hours with a capacity factor of 95%. Refueling outages averaged less than 18 days, significantly below the industry average of 40 days.

Renewable and Natural Gas Fleet Performance

Renewables had a 96% energy capture rate, and natural gas had a 98.2% power dispatch matching.

Commercial Business Success

Continued strong performance in the commercial business, with margins above long-term averages and enhanced margins disclosed earlier in the year.

Crane Clean Energy Center Restart

The restart of the Crane Clean Energy Center validates the revival of nuclear energy and the growing demand for 24/7 clean energy.

Negative Updates

FERC Ruling on Colocation

FERC's 2:1 ruling against Talend's ISA was narrow but poses challenges for colocation and competitive markets.

Capacity Market Challenges

The capacity market has faced delays and challenges in moving forward, leading to uncertainty in price signals necessary for market response.

Company Guidance

In Constellation Energy Corporation's third-quarter 2024 earnings call, the company reported GAAP earnings of $2.82 per share and adjusted operating earnings of $2.74 per share. Due to strong performance, Constellation raised its full-year adjusted operating earnings guidance to a range of $8 to $8.40 per share, with a midpoint of $8.20, a significant increase from the original midpoint of $7.60. The company highlighted a robust nuclear performance with a 95% capacity factor and exceptional refueling outage efficiency, averaging under 20 days per outage, well below the industry average. Constellation also noted a 96% renewable energy capture and an impressive 98.2% power dispatch matching for their renewables and natural gas fleet. Furthermore, the commercial business has outperformed expectations, contributing to an increase in enhanced gross margin by $275 million. Constellation reiterated its commitment to a 13% compounded base EPS growth through 2030, supported by strategic initiatives such as the Crane Clean Energy Center restart and additional nuclear generation uprates.

Constellation Energy Corporation Corporate Events

M&A TransactionsStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures

Constellation Energy Reports Strong 2024 Financial Results

Positive

Feb 18, 2025

On February 18, 2025, Constellation Energy Corporation announced its financial results for the fourth quarter and full year 2024, showcasing a significant increase in earnings per share compared to the previous year. The company also revealed strategic moves, including the acquisition of Calpine Corporation, aimed at enhancing its product offerings and market reach. Their commitment to sustainability was highlighted by their ranking as the number one producer of emissions-free energy for the 11th year and their issuance of a green bond. Constellation also demonstrated shareholder value through share repurchases, dividend increases, and credit rating upgrades.

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.