Shares of three energy companies soared after Google's "nuclear" deal. Is it too late to buy?
Following the rally, analysts' average price targets suggest that shares of Talen Energy, Vistra, and NRG Energy will rise by at least 25%
Talen Energy's shares have been traded on Nasdaq since 2024 / Photo: Nasdaq
After several months of decline, shares of U.S. power companies surged on October 6. The catalyst was Google’s deal with Constellation Energy, according to The Wall Street Journal. By the end of the main trading session, Talen Energy shares had risen 12.4%, Vistra shares 10.8%, and NRG Energy shares 7%.
On October 7, on the Blue Ocean ATS over-the-counter trading platform, Talen Energy’s share price fell by 0.3%, while Vistra’s fell by 0.7%. NRG Energy’s shares continued to rise, according to Yahoo Finance.
Google has signed a 20-year power purchase agreement with Constellation Energy. The agreement calls for the modernization of 11 reactors at six operating nuclear power plants in the United States, which will increase their combined capacity by 890 megawatts. Google plans to use this electricity to power its data centers.
Before trading began on October 6, the stocks of all three companies had fallen by double-digit percentages since the start of the year, according to Barron’s. The publication attributes the pressure on the sector to rising electricity prices and tighter regulation: authorities are trying to determine who should pay for the additional capacity needed, in part, by data centers. This uncertainty is slowing the construction of new power plants, even though several regions are already facing power shortages. The market viewed the Google-Constellation deal as a first step toward resolving this issue, the publication explains.
According to FactSet, the consensus analyst recommendation for Talen Energy and Vistra is “Buy.” The average price target for Talen shares is $465, which implies a 25% increase from the October 6 closing price. For Vistra, the target is $213, with upside potential of 33%. The consensus on NRG Energy is “Overweight,” which is also equivalent to a recommendation to buy these shares. The average price target is $190.93—84% above the most recent closing price.
This article was AI-translated and verified by a human editor
