Based in Baltimore, Maryland, Constellation Energy Corporation (CEG) generates and markets electricity. Valued at a market cap of $59.7 billion, the company sells natural gas and energy-related products, while delivering sustainable solutions across its operational five segments.
Shares of this clean-energy producer have significantly outperformed the broader market over the past 52 weeks. CEG has rallied 78% over this time frame, while the broader S&P 500 Index ($SPX) has increased 21.7%. In 2024, shares of CEG are up nearly 63%, compared to SPX’s 13.9% gain on a YTD basis.
Zooming in further, CEG’s outperformance looks even more pronounced when compared to the Virtus Reaves Utilities ETF’s (UTES) 21.4% gain over the past 52 weeks and 22.4% returns on a YTD basis.
CEG’s strong stock performance in the first half of 2024 is attributed to its robust growth outlook, driven by the effective use of free cash flow and investor enthusiasm for its nuclear power initiatives supporting AI data centers. Additionally, the company's substantial dividend increase and new $1 billion share-repurchase program fueled further investor confidence.
Moreover, shares of CEG rose 6.5% following its Q2 earnings release on Aug. 6 after the company's raised annual profit forecast, which exceeded analysts' expectations, signaling strong future performance. Plus, the positive impact of new rates from the latest PJM interconnection auction further boosted investor confidence.
For the current fiscal year, ending in December, analysts expect CEG’s EPS to grow 56.5% year over year to $7.84. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one occasion.
Among the 14 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 10 “Strong Buy” ratings and four “Holds.”
The configuration is more bullish than three months ago, with seven analysts suggesting a “Strong Buy.”
On Aug. 8, Barclays maintained an “Overweight” rating on CEG and set the price target to $211, noting the company’s status as the operator of the largest carbon-free generation fleet in the United States.
The mean price target of $229.25 represents a premium of 21% to CEG’s current levels. The street-high price target of $250, implies a potential upside of almost 32% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
