Talen Energy Valuation

Q: What is the Fair Price of TLN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TLN ($206.09) is trading below our estimate of [[fair value]] ($537.13)

Is TLN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of TLN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TLN ($206.09) is trading below our estimate of fair value ($537.13)

Significantly Below Fair Value: TLN is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TLN?

Key metric: As TLN is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for TLN. This is calculated by dividing TLN's market cap by their current earnings.
What is TLN's PE Ratio?
PE Ratio	16.9x
Earnings	US$619.00m
Market Cap	US$10.92b

TLN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	6.3x
Enterprise Value/EBITDA	17.8x
PEG Ratio	-4.1x

Price to Earnings Ratio vs Peers

How does TLN's PE Ratio compare to its peers?

The above table shows the PE ratio for TLN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	25.8x
AES AES	9.2x	13.8%	US$9.8b
VST Vistra	28.4x	15.1%	US$52.7b
CWEN.A Clearway Energy	25.3x	23.0%	US$5.5b
ORA Ormat Technologies	40.5x	11.4%	US$4.8b
TLN Talen Energy	16.9x	-4.2%	US$10.9b

Price-To-Earnings vs Peers: TLN is good value based on its Price-To-Earnings Ratio (16.9x) compared to the peer average (25.8x).

Price to Earnings Ratio vs Industry

How does TLN's PE Ratio compare vs other companies in the North American Renewable Energy Industry?

4 Companies	Price / Earnings	Estimated Growth	Market Cap

4 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: TLN is expensive based on its Price-To-Earnings Ratio (16.9x) compared to the Global Renewable Energy industry average (14.4x).

Price to Earnings Ratio vs Fair Ratio

What is TLN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TLN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	16.9x
Fair PE Ratio	20.8x

Price-To-Earnings vs Fair Ratio: TLN is good value based on its Price-To-Earnings Ratio (16.9x) compared to the estimated Fair Price-To-Earnings Ratio (20.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst TLN forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	US$206.09	US$237.22 +15.1%	8.8%	US$269.00	US$202.00	n/a	9
Nov ’25	US$173.88	US$219.40 +26.2%	12.0%	US$268.00	US$185.00	n/a	10
Oct ’25	US$179.01	US$214.56 +19.9%	10.1%	US$264.00	US$185.00	n/a	9
Sep ’25	US$149.61	US$161.60 +8.0%	10.0%	US$178.00	US$140.00	n/a	5
Aug ’25	US$121.10	US$153.50 +26.8%	9.6%	US$178.00	US$140.00	n/a	4
Jul ’25	US$116.00	US$139.67 +20.4%	5.4%	US$145.00	US$129.00	n/a	3
Jun ’25	US$115.15	US$132.00 +14.6%	7.3%	US$145.00	US$122.00	n/a	3
Apr ’25	US$94.80	US$108.00 +13.9%	8.4%	US$120.00	US$98.00	n/a	3
Mar ’25	US$75.60	US$85.33 +12.9%	8.9%	US$96.00	US$79.00	n/a	3
Feb ’25	US$67.00	US$87.50 +30.6%	9.7%	US$96.00	US$79.00	n/a	2

Analyst Forecast: Target price is less than 20% higher than the current share price.

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