An analyst advised to buy Constellation Energy shares. What makes the company stand out?
In June, Constellation signed a major contract with Meta, one of the major players in the artificial intelligence market
Raymond James first rated the shares of nuclear company Constellation Energy and immediately advised to buy them. The analyst noted the company's leadership in generating green energy, managing nuclear plants and attracting customers. It was Constellation that received a major contract from Meta, one of the leaders in the artificial intelligence market, for 20 years.
Details
Raymond James analyst JR Weston initiated analyst coverage on shares of Constellation Energy with an Outperform («above market») rating, which translates to a buy recommendation on the securities, wrote CNBC. The analyst set a $326 target price on the stock, an 8.5% increase from the closing price on June 12, reports TipRanks. Constellation shares fell by about 1% in trading on June 13.
«Constellation Energy, the largest independent energy provider, stands out as the nation's [U.S.] largest clean energy producer, the largest operator of nuclear reactors, and the holder of the largest portfolio of commercial and industrial customers,» Weston wrote in a memo cited by CNBC.
As added GuruFoсus, the analyst also emphasized the company's advantage following the acquisition and integration of Calpine, which earns in the spot and short-term markets. The deal strengthens Constellation Energy's positioning as a low-capital-cost company, providing a
Context
In early June, Constellation Energy contracted a 20-year power supply deal with Meta Platforms, which owns social networks Instagram and Facebook. The agreement was the largest energy deal for Meta, reported the company. For Constellation Energy, the pact could be crucial for it to start building a new reactor, its CEO Joe Dominguez said. Constellation also has a similar contract with Microsoft.
In May, U.S. President Donald Trump signed executive orders aimed at boosting nuclear power in the United States. Constellation shares then rose 2% for the day, along with others in the industry: e.g., Uranium Energy, Energy Fuels and Centrus Energy, as well as Nano Nuclear Energy> and startup Oklo. Investor interest in nuclear power is returning: it is increasingly seen as a more stable and cleaner alternative to wind and solar generation, Reuters noted at the time.
What are other analysts saying?
As follows from MarketWatch data, more than half of the analysts tracking Constellation Energy shares (13 out of 19) advise investors to buy the stock (Buy and Overweight ratings) and only six of them recommend holding (Hold rating). There are no sell recommendations.
The average target price is $320 - up 6.5% from the last closing price.
