CEG: Data Center Power Deals Will Drive Nuclear Cash Flows Higher

Analysts have raised their average price target on Constellation Energy by roughly $30 to $400, citing accelerating commercial momentum, growing nuclear and thermal cash flows, and the scarcity value of its generation assets in an environment of robust electricity demand and expanding data center power needs.

Analyst Commentary

Recent research updates reflect a broadly constructive stance toward Constellation Energy, with several firms lifting price targets in response to strengthening fundamentals and a more supportive power market backdrop. Target hikes into the high 300s and low 400s suggest that the Street is beginning to price in both higher earnings power and the strategic value of the company’s portfolio.

While the overall tone is positive, the mix of Neutral and Overweight ratings indicates that some analysts remain cautious on valuation, execution around growth initiatives, and the pace at which upside can be realized.

Bullish Takeaways

• Bullish analysts highlight accelerating commercial momentum, particularly ahead of upcoming earnings, as evidence that Constellation can convert robust demand into sustained revenue and margin growth.
• Multiple price target increases into the $390 to $422 range signal confidence that the company’s nuclear and thermal assets can deliver higher cash flows, supporting a premium valuation versus peers.
• The expanding data economy and recent long term power agreements with large technology customers are seen as reinforcing long duration growth visibility and underpinning higher long term earnings multiples.
• Some analysts see the scarcity value of Constellation’s generation fleet and potential buybacks as powerful capital allocation levers that can drive further upside to the share price.

Bearish Takeaways

• Despite higher targets, several Street views remain Neutral. This suggests concern that the current share price already discounts a robust growth trajectory and leaves less room for multiple expansion.
• Bearish analysts are cautious that the company must execute flawlessly on integrating planned transactions and capturing data center demand. Any delay or misstep could potentially pressure earnings expectations.
• There is lingering uncertainty around the durability of elevated power and capacity prices. This could limit upside if market conditions normalize faster than anticipated.
• Some commentary implies that further upside will increasingly depend on additional large scale power deals and M&A. This introduces event risk around the timing and valuation of future transactions.

What's in the News

• The U.S. Department of Energy outlined plans for the federal government to own as many as 10 large nuclear reactors, highlighting Constellation as one of several publicly traded beneficiaries of expanded nuclear investment (Bloomberg).
• Constellation secured a $1 billion DOE loan for its Crane Clean Energy Center, lowering financing costs and supporting the restart of a key nuclear unit to meet surging data center and electrification-driven power demand (Company announcement).
• The company announced senior leadership changes tied to the pending Calpine transaction, including the promotion of CFO Dan Eggers to Senior Executive Vice President, Finance and Data Economy, and the appointment of Shane Smith as the new CFO, effective at closing (Company announcement).
• Constellation provided an update on share repurchase activity, disclosing buybacks of 183,135 shares in Q3 2025 and bringing total repurchases to roughly 5.4% of shares outstanding under its 2023 authorization (Company filing).
• Constellation reported that its 21 nuclear reactors ran at 98.8% capacity during the summer heatwaves, underscoring nuclear reliability and supporting up to 2,000 megawatts of incremental baseload capacity through uprates and the Crane restart (Company announcement).

Valuation Changes

• Fair Value Estimate has edged down slightly, from approximately $403.77 to $399.93 per share, implying a modest reduction in modeled intrinsic value.
• Discount Rate is effectively unchanged, moving fractionally from 6.956% to 6.956%, signaling no meaningful shift in perceived risk or cost of capital.
• Revenue Growth has been revised lower, from about 7.31% to 7.05%, reflecting slightly more conservative top line expansion assumptions.
• Net Profit Margin has increased modestly, from roughly 13.45% to 13.67%, indicating a small improvement in expected profitability.
• Future P/E has decreased from about 37.11x to 36.42x, suggesting a slightly less aggressive multiple on forward earnings in the valuation framework.