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Talen Energy Corp
(NASDAQ:TLN)
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Rating:63Neutral
Price Target:
$403.00
▲(31.57% Upside)
Action:Reiterated
Date:10/08/26
The score is held back primarily by high leverage and volatile/negative net profitability despite strong TTM cash generation. Offsetting that, technicals are very strong, and the latest earnings call and recent corporate actions emphasize raised cash flow guidance and aggressive capital returns. Valuation is a drag due to the negative P/E and lack of dividend yield data.
Positive Factors
Strong Cash Generation
TTM operating cash flow of about $1.26B and free cash flow of about $0.90B show meaningful cash conversion. Raised 2026 guidance and the 2027-28 outlook indicate management expects strong cash generation to support debt service, investment and shareholder returns.
Negative Factors
High Leverage
Debt has risen sharply while equity remains modest, leaving Talen with leverage near six times debt to equity. This limits financial flexibility, increases refinancing and interest sensitivity, and makes the business more exposed when wholesale power markets or asset earnings weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
TTM operating cash flow of about $1.26B and free cash flow of about $0.90B show meaningful cash conversion. Raised 2026 guidance and the 2027-28 outlook indicate management expects strong cash generation to support debt service, investment and shareholder returns.
Read all positive factors
Talen Energy Corp (TLN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.08B
Dividend YieldN/A
Average Volume (3M)982.93K
Price to Earnings (P/E)―
Beta (1Y)1.54
Revenue Growth27.47%
EPS Growth-208.54%
CountryUS
Employees1,880
SectorUtilities
Sector Strength65
IndustryIndependent Power Producers
Share Statistics
EPS (TTM)-4.04
Shares Outstanding47,300,000
10 Day Avg. Volume1,523,124
30 Day Avg. Volume982,933
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)15.67
Price to Sales (P/S)6.52
P/FCF Ratio41.88
Enterprise Value/Market Cap1.49
Enterprise Value/Revenue7.65
Enterprise Value/Gross Profit17.16
Enterprise Value/Ebitda37.44
Forecast
1Y Price Target
$457.27Price Target Upside49.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)20.56
Revenue Forecast (FY)$4.45B
Talen Energy Corp Business Overview & Revenue Model
Company Description
Talen Energy Corporation functions as an independent power producer and infrastructure enterprise, providing electricity, capacity, and essential ancillary services to wholesale energy markets across the United States. The company's diverse genera...
How the Company Makes Money
Talen Energy primarily makes money by generating electricity at its power plants and selling that electricity into wholesale power markets. Key revenue streams generally include: (1) Energy sales: revenue from selling megawatt-hours (MWh) into day...
Talen Energy Corp Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call was strongly positive, supported by higher second-quarter and year-to-date cash flow, raised 2026 guidance, increased 2027 and 2028 per-share outlooks, strong fleet performance, favorable PJM pricing trends, significant shareholder-return plans, and an expanding data center and new-capacity pipeline. The main challenges were the widened PPL basis, thinly traded out-year markets, regulatory uncertainty around RBP and IRAS, and the need for new capacity projects to meet pricing and return hurdles.Positive Updates
Strong Second-Quarter Cash Generation
Talen delivered $374 million of adjusted EBITDA and $212 million of adjusted free cash flow in the second quarter, with results substantially higher than the same period last year. Results were primarily driven by contributions from Freedom and Guernsey, higher PJM capacity pricing, higher generation volumes from Susquehanna and the fossil fleet, and the AWS contract ramp.
Negative Updates
PPL Basis Widened Significantly
The historical PPL power price discount to PJM West Hub was approximately $9 per MWh, but it widened to approximately $20 per MWh over the last several months. Management attributed the wider basis to transmission outages associated with system upgrade work south of Talen's generation.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Second-Quarter Cash Generation
Talen delivered $374 million of adjusted EBITDA and $212 million of adjusted free cash flow in the second quarter, with results substantially higher than the same period last year. Results were primarily driven by contributions from Freedom and Guernsey, higher PJM capacity pricing, higher generation volumes from Susquehanna and the fossil fleet, and the AWS contract ramp.
Read all positive updates
Company Guidance
Talen raised 2026 guidance to an adjusted EBITDA range of $2.025 billion-$2.225 billion and an adjusted free cash flow range of $1.2 billion-$1.35 billion; its 2027 base-case free cash flow outlook remains $34 per share and increases to $40 per share in 2028, based on a flat share count of 47.9 million shares as of the end of Q2, while buybacks imply approximately $37 a share in 2027 and $48 a share in 2028. Talen anticipates generating approximately $4 billion of adjusted free cash flow between the balance of this year through the end of 2028 and returning at least 70% of this cash, $2.8 billion, to shareholders through share buybacks, with more than $1.3 billion of excess cash and a target net leverage ratio at three and a half times; 2027 guidance and 2028 and 2029 outlooks are expected on the third quarter earnings call. The company said accretive M&A, acceleration of its existing 2 GW PPA, and new data center PPAs could each add 10% or more to its cash flow profile, potentially allowing adjusted free cash flow to exceed $50 per share by 2028 and widening the potential free cash flow yield into the high teens; as the AWS campus ramps to full build-out, projected to be sometime between 2028 and 2030, long-term contracted margin increases from 10% to 35%, and with an additional approximately 2 GW of long-term contracts, Talen could reach 60% of its gross margin mix on its long-term contracts.Talen Energy Corp Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
28
Negative
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.53B | 2.63B | 2.07B | 2.44B | 2.41B | 1.77B |
| Gross Profit | 1.57B | 1.00B | 664.00M | 1.05B | 770.00M | 241.00M |
| EBITDA | 721.00M | 512.00M | 1.77B | 977.00M | -355.00M | -405.00M |
| Net Income | -185.00M | -219.00M | 998.00M | 613.00M | -1.29B | -989.00M |
Balance Sheet | ||||||
| Total Assets | 15.07B | 10.90B | 6.11B | 7.12B | 10.72B | 10.05B |
| Cash, Cash Equivalents and Short-Term Investments | 231.00M | 752.00M | 329.00M | 400.00M | 988.00M | 276.00M |
| Total Debt | 9.57B | 6.82B | 3.00B | 2.82B | 4.35B | 4.74B |
| Total Liabilities | 13.43B | 9.81B | 4.72B | 4.59B | 11.20B | 9.32B |
| Stockholders Equity | 1.62B | 1.09B | 1.39B | 2.46B | -573.00M | 733.00M |
Cash Flow | ||||||
| Free Cash Flow | 510.00M | 409.00M | 54.00M | 516.00M | -125.00M | -518.00M |
| Operating Cash Flow | 796.00M | 615.00M | 243.00M | 864.00M | 187.00M | -294.00M |
| Investing Cash Flow | -6.71B | -4.00B | 1.05B | -347.00M | -368.00M | -280.00M |
| Financing Cash Flow | 6.02B | 3.77B | -1.82B | -604.00M | 426.00M | 956.00M |
Talen Energy Corp Technical Analysis
Positive
306.29
Price Trends
323.49
Positive
349.80
Positive
351.69
Positive
Market Momentum
17.52
Negative
70.22
Negative
91.23
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 306.29 is below the 20-day moving average (MA) of 326.52, below the 50-day MA of 323.49, and below the 200-day MA of 351.69, indicating a bullish trend. The MACD of 17.52 indicates Negative momentum. The RSI at 70.22 is Negative, neither overbought nor oversold. The STOCH value of 91.23 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $54.49B | 25.34 | 41.48% | 0.60% | -20.55% | -6.51% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $10.69B | 5.69 | 37.94% | 4.70% | 8.22% | 88.79% | |
65 Neutral | $104.80B | 27.14 | 14.69% | 0.60% | 20.74% | 7.00% | |
63 Neutral | $18.08B | -88.72 | -14.09% | ― | 27.47% | -208.54% | |
53 Neutral | $657.65M | 361.05 | -0.52% | 8.70% | 8.47% | ― | |
50 Neutral | $22.53B | 26.54 | 25.38% | 1.85% | 12.70% | 54.89% |
* Utilities Sector Average
TLN
Talen Energy Corp
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CEG
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Talen Energy Corp Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock Buyback
Talen Energy Announces CEO Transition and Capital Return
Positive
Sep 29, 2026
Talen Energy Corp. announced on Sept. 29, 2026 that its board has appointed President Terry L. Nutt as the company’s next chief executive officer and president, effective Jan. 1, 2027, with outgoing CEO Mac McFarland stepping down from the b...
Business Operations and StrategyFinancial Disclosures
Talen Energy Highlights Strong PJM Capacity Auction Results
Positive
Jul 15, 2026
On July 14, 2026, Talen Energy reported the results of PJM Interconnection’s Base Residual Auction for the 2028/2029 planning year, covering June 1, 2028 through May 31, 2029. The company cleared 10,180 megawatts at a clearing price of $325 ...
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.