Constellation runs the largest fleet of nuclear plants in America and, since buying Calpine in January, one of the largest fleets of gas plants. It sells carbon-free power to Microsoft, Meta and others building data centers. The shares are down about 37% from their high as investors question how fast that demand turns into earnings.
Today’s close against the report’s numbers, updated every weekday. The analysis is as of October 22, 2026; the rating as of October 22, 2026. Both change only when the report is revised.
The cash-flow model’s bear-to-bull range, the probability-weighted value, the price, its 52-week range and the analysts’ average target. The copper line marks the base case; the fine dotted line is today’s close.
Written on October 22, 2026, ahead of its third-quarter results in early November. Figures are from the company’s filings and releases unless noted. Not investment advice. The author holds no CEG shares directly.
Constellation owns the largest nuclear fleet in America, roughly a fifth of the country’s nuclear output, and since January the Calpine fleet of gas-fired and geothermal plants. It sells power wholesale and directly to large businesses and homes. Its nuclear plants run around the clock without carbon emissions, which is what technology companies want for data centers: Microsoft signed a 20-year contract to restart the former Three Mile Island unit, and Meta one for the Clinton plant in Illinois.
Most of its earnings come from selling power at market prices or under contracts, which makes results depend on electricity prices, capacity auctions and how many long-term contracts it signs.
Second-quarter adjusted earnings rose to $2.55 a share from $1.91, mostly from Calpine; reported earnings fell to $1.42 on mark-to-market and merger costs. Constellation raised 2026 guidance to $11.50–12.50 a share from $11–12, signed 920 megawatts of new 15–20 year contracts starting in 2029–2032 (including Walmart), and is selling a Texas gas plant to LS Power for $860 million to meet the Calpine merger conditions.
The March outlook disappointed investors: base earnings growth of more than 20% in total from 2026 to 2029, slower in the first years, against expectations of much faster growth from data-center demand. That is the main reason the shares are down a third.
| FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | TTM Jun 2026 | |
|---|---|---|---|---|---|---|
| Revenue | $19.6B | $24.4B | $24.9B | $23.6B | $25.5B | $31.3B |
| Operating margin | −1.8% | 2.0% | 6.5% | 18.5% | 12.1% | 14.7% |
| Net income | −$0.2B | −$0.2B | $1.6B | $3.7B | $2.3B | $3.5B |
| Operating cash flow | −$1.3B | −$2.4B | −$5.3B | −$2.5B | $4.2B | $4.2B |
| Capital spending | $1.3B | $1.7B | $2.4B | $2.6B | $2.9B | $3.9B |
| Free cash flow | −$2.7B | −$4.0B | −$7.7B | −$5.0B | $1.3B | $0.3B |
Constellation was spun off from Exelon in 2022. Its cash flow was negative in 2022–2024 mainly because of collateral posted on hedges and the way it accounts for customer receivables it sells, not losses in the business. The last column includes Calpine for six months. The quarterly view shows each quarter.
At June 30 Constellation had $24.7 billion of debt and little cash, about triple a year earlier, after the Calpine deal, which also added shares (360 million diluted, from 314 million). It still bought back $2.0 billion of stock in the first half. Capital spending is well above depreciation as it uprates reactors and adds gas capacity.
| Assumption | Base case | Basis |
|---|---|---|
| Revenue, 2026 | about $40B | Calpine for a full year (estimate) |
| Growth, 2027 and 2028 | 5%, then 7% | New contracts start in 2029; fades to 3% by year 10 |
| Operating margin | 16.5% rising to 19% | Matches 2026 guidance, then contract repricing |
| Net investment | $2.5B a year to 2028 | Uprates and new gas plants |
| Discount rate | 9.3% | Beta 1.24, 21% debt |
| Terminal growth | 3.0% | With a 12% return on new capital |
| Bear | Base | Bull | |
|---|---|---|---|
| Growth, 2027 / 2028 | 2% / 3% | 5% / 7% | 8% / 10% |
| Long-run operating margin | 15% | 19% | 23% |
| Discount rate | 10.3% | 9.3% | 8.3% |
| Value per share | $71 | $185 | $351 |
| Probability | 25% | 50% | 25% |
Weighted 25/50/25: $198. The range is wide because power prices move earnings a lot. The bear case is lower power prices and a slower data-center build; the bull case is a wave of long-term contracts at high prices.
| Discount rate | 8.5% | 9.0% | 9.5% | 10.0% | 10.5% |
|---|---|---|---|---|---|
| Value per share | $221 | $197 | $177 | $159 | $144 |
Every figure in this valuation comes from one model script, rerun and checked against this page each time the site is built. The XLSX model rebuilds it in live formulas: change any blue input and every year’s cash flow, the bridge to the value, the scenarios and the sensitivity table recalculate.
| To justify the price, you need | Against |
|---|---|
| Revenue growth of about 12% a year in 2027 and 2028, then the same fade | 5% and 7% |
| Or a long-run operating margin of about 24% | 19% |
| Or a discount rate of about 7.9% | 9.3% |
Even after a 37% fall, the price assumes more than the company’s own outlook: roughly the bull case for margins. Analysts average about $348, assuming more contracts at higher prices sooner.
| Risk | Why it matters |
|---|---|
| Power prices | Most earnings depend on wholesale prices and capacity auctions. |
| Data-center pace | Some states are slowing large data-center connections; contracts start only in 2029. |
| Debt | Leverage tripled with Calpine. |
| Regulation | Regulators may limit plants supplying data centers directly or cap capacity prices. |
| Nuclear operations | An outage at a large plant costs hundreds of millions. |
Upside: more 20-year contracts with technology companies, reactor uprates, higher capacity prices and the federal nuclear production tax credit.
Constellation owns the plants technology companies most want power from, and Calpine made it far larger. Its own outlook has earnings growth back-loaded toward 2029, and even after a 37% fall the price assumes margins near the model’s bull case.
What would change the value: Third-quarter results in early November, new 20-year contracts with data-center owners and capacity-auction prices are the next inputs.
Ranges, not three cases. The expected value is the average of 4,000 runs of this report’s own model, with every input drawn from a range: the base case is the middle, and the bear and bull cases are the 10th and 90th percentiles. Business inputs move together; the discount rate moves on its own. The 25/50/25 weighting in the valuation section gives $198. How the ranges work
Two different questions. The rating is relative: it asks whether the stock is cheaper or dearer than the S&P 500 on the same assumptions. The absolute view asks whether it is worth its price at all: on its own the stock trades above our estimated value, which is 26% below the price.
On the same assumptions every report uses (a 5.15% Treasury yield and a 4.5% equity premium), the S&P 500 itself is worth about 68% of its price. The rating compares each stock with that: Buy if it is at least 15% cheaper than the market on this basis, Sell if at least 15% dearer, Hold in between. It is the same rule for every company, whoever owns it. The rating depends on that assumption: it would be Buy if the index grows 6% a year and Hold at 10%, against 8% here. How ratings work
Against the Street: Analysts average about $348, assuming more long-term contracts at higher prices sooner than the company’s own outlook shows.
| Measure | Constellation Energy | Industry median | Rank | |
|---|---|---|---|---|
| Revenue growth, last fiscal year | 8.3% | 9.7% | 10 of 15 | Worse than the median |
| Operating margin | 14.7% | 23.1% | 14 of 15 | Worse than the median |
| Price to earnings | 27.1× | 21.7× | 14 of 15 | Worse than the median |
| Free cash flow yield | 0.3% | −3.1% | 6 of 15 | Better than the median |
Peers: the 14 other S&P 500 companies in Electric Utilities with complete data (AEP, DUK, EIX, ES, ETR, EVRG, EXC, FE, LNT, PEG, PPL, SO, VST, WEC). Last twelve months where reported, from SEC filings; prices from the latest close. A lower price-to-earnings ratio ranks higher. These figures update with each data run; the rating does not.
Demand is real; the earnings arrive later than investors hoped.
| What | Figures | Source |
|---|---|---|
| Latest results | $2.55 (Adjusted EPS, Q2 2026, +34%), $11.50–12.50 (2026 adjusted EPS guidance, raised), 920 MW (New long-term contracts), 93.0% (Nuclear capacity factor) and others | Q2 2026 results (8-K); Guidance raise; The March outlook |
| The numbers (five-year table) | Five years of annual figures and the last twelve months | SEC XBRL company facts; latest: 10-K for the period to 2025-12-31, 10-Q for the period to 2026-06-30 |
| Price at writing | $255.21 (Close, Oct 22, 2026) | Yahoo Finance; the time of the quote is stated beside the price |
| Discount rate inputs | 10-year Treasury 5.15%, equity risk premium 4.5% | Fixed for every report so they can be compared; How ratings work |
| Valuation | Every value, case and sensitivity | This site’s model: XLSX, CSV |
| Checked by hand | Not yet | Reports are added to the audit log as they are revised |
| Input | Bear (10th percentile) | Base (median) | Bull (90th percentile) |
|---|---|---|---|
| Growth, first forecast year | 2.0% | 5.0% | 8.0% |
| Growth, second forecast year | 3.0% | 7.0% | 10.0% |
| Operating margin, near term | 15.0% | 16.5% | 17.0% |
| Operating margin, long run | 15.0% | 19.0% | 23.0% |
| Net investment, first years ($B) | 3/3/2.5/2.5 | 2.5/2.5/2/2 | 2.5/2.5/2/2 |
| Discount rate | 10.3% | 9.3% | 8.3% |
| Simulation result | |
|---|---|
| Expected value (average of 4,000 runs) | $188.99 |
| Likely range, 10th to 90th percentile | $101.27 to $288.68 |
| Median | $182.53 |
| Chance the value is above the price | 18% |
| Chance it is cheaper than the S&P 500 | 55% |
Each input is drawn from a split normal: its bear and bull values are the 10th and 90th percentiles, so the two sides can differ. Business inputs share a common factor (correlation 0.6); the discount rate moves on its own. Inputs not listed are held at their base value. How the simulation works.