Key insights
- Constellation Energy (CEG) is expected to report earnings, with options pricing suggesting a potential 7% move post-report. Analysts are largely bullish, but UBS recently lowered its price target due to conservative guidance. Concerns exist about increased clean energy supply impacting prices due to data center demand. The stock has declined recently but is supported by expectations of benefiting from AI data center power needs. Overall, the news has a slightly positive influence.
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Constellation Energy is set to report earnings Monday morning, with the energy stock seen making a sizable swing after the results.
Based on current options pricing, traders expect Constellation (CEG) shares could move up to about 7% by the end of the week in the wake of the report. A move of that size from Friday's close around $304 could see shares rise to $324, recovering some of their recent losses, or slip to $283 at the low end.
Constellation shares have lost about a third of their value since setting a record high in October. Morgan Stanley analysts suggested some investors may be concerned booming data center demand could drive an increase in clean energy supply that would eventually lead to lower prices.
Though Constellation's stock has lost ground lately, it and several other nuclear energy stocks have been boosted in recent years by expectations they could benefit from the rising power demands of big tech companies for their AI data centers.
UBS analysts last month cut their price target to $388 from $420 following an investor update from Constellation, which the analysts said pressured the stock due in part to a "very conservative guidance update," adding that investors would have to remain patient while Constellation waits for regulatory clarity before it can make some key deals.
Constellation is expected to report adjusted earnings of $2.34, up 20 cents year-over-year, on a 28% jump in revenue to $8.66 billion for the first quarter, according to analyst estimates compiled by Visible Alpha.
Analysts are largely bullish on Constellation, with all but one of the eight analysts with current ratings tracked by Visible Alpha calling the stock a "buy," with one neutral rating. Their average price target just under $370 would suggest upside of about 22% from the stock's close Friday.
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