Breakaway gap technical set ups often produce big stock market returns. CEG is one stock that exhibits all the right traits.
Constellation Energy (CEG) has received positive analysts' reports after the power utility's announcement last Friday it would be restarting Pennsylvania's Three Mile Island Unit 1 nuclear plant to provide electricity for Microsoft's (MSFT) data centers.
“AI is here to stay,” said Constellation Energy Chief Executive Officer Joe Dominguez on "Bloomberg Markets." The power provider is going to restart a reactor at the Three Mile Island nuclear power plant in Pennsylvania so it can be used to power artificial intelligence for Microsoft.
The Constellation Energy Corporation (NASDAQ: CEG) stock price went parabolic on Friday, reaching its highest point on record after inking a deal with Microsoft, the second-biggest company in the world. CEG shares surged to a high of $254, bringing the year-to-date gains to 120%, making it one of the best-performing companies in Wall Street.
Sophie Karp, Keybanc, joins 'Fast Money' to talk what Constellation's plan for reopening the nuclear plant at Three Mile Island could mean for the entire energy sector.
Constellation Energy Group plans to reopen Three Mile Island Unit 1. The electric utility will use the nuclear power plant to generate electricity for Microsoft server farms.
Constellation Energy Corporation (CEG) reachead $200.33 at the closing of the latest trading day, reflecting a -0.45% change compared to its last close.
In the most recent trading session, Constellation Energy Corporation (CEG) closed at $189.93, indicating a +1.43% shift from the previous trading day.
Constellation Energy has strong nuclear capacity and IPP status, benefiting from rising electricity demand driven by AI and climate change. CEG's 10% earnings growth guidance is conservative, with potential upside from higher electricity prices and data center PPAs. I rate CEG a Hold due to moderate growth and topped valuation, preferring VST and TLN for better potential.
Constellation Energy's explosive growth is driven by a perfect storm of reduced supply, surging demand, and regulatory bottlenecks, leading to high grid auction prices. A significant portion of CEG's earnings growth is due to one-time factors, making the current 24X forward multiple appear overvalued. Future grid auction prices are expected to normalize, reducing CEG's projected 2026 earnings from $9.47 to a stabilized $8.22 per share.
New nuclear plant designs, called small modular reactors, could speed deployment of carbon-free power in the future as electricity demand rises. These small reactors would have simpler designs, making them easier and cheaper to build than current plants.
Constellation Energy's stock has pulled back despite positive fundamentals, including earnings estimate increases since February of 35% for 2023 and 55% for 2030. The PJM capacity market's skyrocketing prices significantly benefit Constellation, boosting EPS forecasts by $0.25 in 2025 and $1.25 in 2026. With some analysts expecting capacity prices to double again in the next auction, there is even more upside potential for earnings.