Key Stats for CEG Stock
- Past-Week Performance: 7%
- 52-Week Range: $161 to $413
- Valuation Model Target Price: $354
- Implied Upside: 20%
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What Happened?
Constellation Energy stock rose about 7% this week, finishing near $295 per share as investors responded to a bullish analyst action and expanding contracted power capacity tied to AI-driven data center demand.
Shares moved higher after Barclays reinstated coverage with an Overweight rating and a $356 price target, implying about 31% upside from the prior close, stating that “power is still key to enabling the data center economy.”
The stock climbed specifically because Constellation secured incremental contracted load growth. Its Calpine unit signed a new 380 megawatt agreement with CyrusOne to power a Texas data center and entered an exclusive Phase 2 agreement for another 380 MW, bringing total contracted capacity for CyrusOne facilities in Texas to more than 1,100 MW.
The expansion follows Constellation’s recently completed $16.4 billion acquisition of Calpine and reinforces its role as a scaled independent power producer positioned to benefit from rising electricity consumption.
Institutional activity also drew attention. Capital International Investors removed 9,301,118 shares in Q4 2025, cutting its stake by 35.6%, while UBS Asset Management reduced 4,530,512 shares, a 73.6% decrease.
Offsetting those reductions, Victory Capital Management added 1,783,796 shares, increasing its position by 460.8%, Capital World Investors added 1,425,820 shares, up 155.1%, and Jennison Associates added 1,064,684 shares, a gain of 18.0%, highlighting both profit-taking and continued accumulation among large holders.
Overall, this week’s advance reflects tangible contract expansion, supportive analyst sentiment, and active institutional repositioning.
The rally suggests investors are increasingly pricing in stronger contracted power volumes and sustained demand growth through 2026.
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Is CEG Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 3.4%
- Operating Margins: 20.6%
- Exit P/E Multiple: 25.5x
Revenue growth is expected to remain moderate, but earnings leverage is the core driver. Because nuclear facilities operate with high fixed costs, incremental improvements in contracted pricing and capacity utilization can significantly expand operating income, which helps explain why forward 2 year EBITDA growth is projected at 24.3%.
Contracted data center load growth, realized wholesale power prices, and disciplined hedging execution represent the most meaningful business drivers this year.
The company’s low net debt to EBITDA ratio of 0.83x also provides flexibility for capital allocation while supporting balance sheet stability.
Based on these inputs, the model estimates a target price of $354, implying about 20% total upside and a 10.4% annualized return through 2027.
At current levels near $295, Constellation Energy appears modestly undervalued, with future performance likely driven by nuclear asset optimization, long-term contracting strength, and structurally rising electricity demand rather than aggressive revenue acceleration.
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