Is Constellation Energy Worth Loading Up On Ahead Of Earnings? Analysts Weigh In

• Constellation Energy is expected to report first-quarter results next week, with analysts expecting a 28% increase in revenue year-on-year.
• The Baltimore, Maryland-based company has benefited from the AI boom and it produces about 10% of all clean energy in the U.S.
• The company has long-term agreements with major tech companies, including Meta and Microsoft.

Constellation Energy Corp. (CEG), the largest operator of nuclear power plants in the United States, is gaining traction among investors as demand for its carbon-free energy has grown amid surging power needs driven by AI.

Message volume around CEG stock was ‘high,’ surging 200% over the past 24 hours, Stocktwits data showed. Meanwhile, the stock has also seen a 73% increase in watchers over the past year.

What’s Working For Constellation Energy?

Constellation Energy has been a beneficiary of the AI boom. The company operates about 55 gigawatts of capacity from its nuclear, natural gas, geothermal, hydro, wind and solar facilities that can power about 27 million homes.

The Baltimore, Maryland-based company also produces about 10% of all clean energy in the U.S., giving it massive scale in the energy transition. At the same time, Constellation serves about 2.5 million customers, including a considerable chunk of Fortune 100 companies.

The company has long-term agreements with major tech companies, including Meta Platforms (META) and Microsoft Corp. (MSFT) to expand and monetize its nuclear fleet. Last year, it entered a 20-year, 1,121 megawatts deal with Meta to supply clean energy from its Illinois plant. It also has a separate 20-year agreement with Microsoft to restart a Pennsylvania nuclear plant to power its AI data centers with 835 MW of carbon-free energy.

Constellation Energy is expected to report first-quarter (Q1) results next week. Analysts expect the company to post revenue of $8.71 billion, up about 28% compared to $6.79 billion reported last year, alongside earnings per share of $2.61.

Wall Street Consensus

Ahead of its earnings report, TD Cowen lowered the price target on Constellation Energy to $381 from $390 and kept a ‘Buy’ rating on the shares. This represents an upside potential of about 18.7% from its last close. The analyst expects the company to report a "relatively quiet quarter," with earnings modestly up compared to last year based on capacity prices, as per TheFly.

Scotiabank analyst Andrew Weisel lowered the firm's price target on Constellation Energy to $441 from $481 and kept an ‘Outperform’ rating on the shares, saying that the firm expects solid results for Q1 and remains bullish on the stock. Meanwhile, Morgan Stanley raised the firm's price target on Constellation Energy to $361 from $360 and kept an ‘Overweight’ rating on the shares.

According to data from Koyfin, the 12-month average price target on CEG shares is $367.68, indicating an upside potential of about 14.5%. Of the 21 analysts covering the stock, 17 have a ‘Buy’ or higher rating.

Retail Stance

On Stocktwits, retail sentiment around CEG stock has stayed in the ‘bullish’ territory.

One bullish user said, “With earnings next week, this is looking good. Will probably move to $330-$335 range, and then a push for $380 after earnings.”

CEG stock has gained more than 29% in the last year.

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