Constellation Energy (CEG): Evaluating Valuation Following Surge in Clean Power Investments and Data Center Demand

Constellation Energy (CEG) has continued to capture attention after securing a $1 billion loan from the U.S. Department of Energy for its Crane Clean Energy Center. This development reflects how surging electricity demand is shaping the company’s future.

See our latest analysis for Constellation Energy.

Momentum has been building for Constellation Energy throughout 2025. The stock’s 48% year-to-date share price return highlights renewed optimism tied to record electricity demand, bold expansion moves, and a leadership reshuffle as the Calpine merger approaches. The company’s three-year total shareholder return of 283% further underscores a compelling long-term story as clean power infrastructure and data center demand accelerate.

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With Constellation Energy’s rapid gains and multi-year outperformance, investors are left wondering if the stock is undervalued given its growth story, or if the market has already priced in all the future upside.

Most Popular Narrative: 11.1% Undervalued

The narrative fair value estimate for Constellation Energy lands at $403.77 per share, well above the most recent closing price of $359.09. This signals a notable gap, highlighting where analysts believe future growth and cash flow could drive the stock next.

Strategic investments and progress in nuclear plant restarts (Crane Clean Energy Center), upgrades (900MW in engineering), and selective M&A (Calpine acquisition) provide visible avenues for substantial capacity additions and operational synergies. These factors have the potential to enhance EBITDA and free cash flow over the medium to long term.

Read the complete narrative.

Curious what major financial bets and bold nuclear investments are behind this target? Explore the growth projections and margin assumptions that contribute to this fair value calculation.

Result: Fair Value of $403.77 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing regulatory shifts or delays in major customer contracts could quickly challenge the current growth narrative and Constellation's premium valuation.

Find out about the key risks to this Constellation Energy narrative.

Another View: High Price Relative to Peers

While analysts see Constellation Energy as undervalued, our review of its price-to-earnings ratio paints a different picture. Currently trading at 40.9x, the company's ratio is almost double the US Electric Utilities industry average of 20.9x and significantly above the peer average of 21.8x. Even when compared to a fair ratio of 39.6x, Constellation appears expensive. This raises questions about how much future growth is already priced in.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Constellation Energy Narrative

If you want to dive deeper or prefer hands-on research, you can quickly build your own view and challenge the results presented here. Do it your way.

A great starting point for your Constellation Energy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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