Constellation Energy Stock Soars on Its $26 Billion Buy. Here's Why Wall Street Likes the Deal
Constellation Energy is one of the best S&P 500 stocks Friday after the utility said it will buy Calpine in a cash-and-stock deal valued at $26 billion.


Constellation Energy (CEG) is one of the best S&P 500 stocks Friday, up more than 22% at last check, after the utility company said it will acquire independent power producer Calpine for a net purchase price of $26.6 billion. The merger of the two firms will create the nation's largest clean energy provider.
Constellation said it will use 50 million CEG shares priced at the 20-day volume-weighted average price (VWAP) of approximately $237.98 apiece and $4.5 billion in cash to fund the purchase. It will also assume roughly $12.7 billion of Calpine's net debt.
"This acquisition will help us better serve our customers across America, from families to businesses and utilities," said Constellation CEO Joe Dominguez in a statement. "By combining Constellation's unmatched expertise in zero-emission nuclear energy with Calpine's industry-leading, best-in-class, low-carbon natural gas and geothermal generation fleets, we will be able to offer the broadest array of energy products and services available in the industry."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The transaction is expected to immediately begin boosting Constellation's earnings, with the company projecting an increase of more than 20% to EPS in 2026 and adding at least $2 per share to earnings in future years. It's also expected to add more than $2 billion of free cash flow annually.
The transaction is subject to the customary closing conditions, including regulatory approvals from numerous agencies, Constellation said. If all goes as planned, the transaction is expected to close within 12 months.
Is Constellation Energy stock a buy, sell or hold?
The utility stock was one of the top performers of 2024, ending the year up nearly 93% on a total return basis (price change plus dividends) and it remains a top stock pick this year too. Indeed, Wall Street is overwhelmingly bullish on the large-cap stock.
According to S&P Global Market Intelligence, the consensus recommendation among the 18 covering analysts that it tracks is Buy.
However, analysts' price targets may need to be adjusted following the news of the acquisition. At last check, the average analyst price target of $279 represents a discount of more than 7% to current levels.
Financial services firm UBS Global Research is one of those with a Buy rating on CEG stock, along with a $289 price target.
After rumors of the deal surfaced earlier this week, UBS Global Research analyst William Appicelli said the deal would position Constellation "for a variety of market conditions and have more volumetric upside as power demand grows, as most expect it will in a meaningful manner."
He added that "the addition of a large gas portfolio opens the door for CEG to be more flexible in meeting future large load demand."
Related Content
- Why Walgreens Is the Best S&P 500 Stock After Earnings
- Analysts' Top S&P 500 Stocks to Buy Now
- Stock Picks That Billionaires Love
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff Noise
Markets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Amtrak Joins Prime Day With Deals on Fares — But You’ll Have to Act Fast
Prime members can score 20% off midweek fares — what travelers should know before booking.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff Noise
Markets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Dividend Increases: 7 Stocks With Rising Payouts
While dividend growth has been slowing, certain stocks have raised their dividend payouts. These are some selections.
-
Key to Financial Peace of Mind: Think 'What's Next?' Rather Than 'What If?'
Even if you've hit your magic number for retirement, it's hard to stop worrying about money. Giving it a clear purpose is one way to reduce financial anxiety.
-
Three Estate Planning Documents a Business Owner Can't Afford to Skip
A business owner's estate plan should protect the company and its employees as well as the entrepreneur's heirs. These three documents are critical.
-
Stock Market Today: Trump's Copper Comments Cause a Stir
Markets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful Bill
The law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.
-
Five Ways Retirees Can Keep Perspective Through Market Jitters
Market volatility is a recurring event with historical precedents (the dot-com bubble, global financial crisis and pandemic), each followed by recovery. Here's how people who are near or in retirement can navigate economic uncertainty.
-
Stock Market Today: Trump Reextends His Tariff Deadline
When it comes to this president, his trade war, the economy, financial markets and uncertainty, "known unknowns" are better than "unknown unknowns."