Constellation Energy (CEG) stock is spiraling Monday after a U.S. regulatory agency made a decision that is impacting nuclear power producers. And this is overshadowing the utility company's impressive earnings report.
In the three months ended September 30, Constellation's operating revenue increased 7.2% year over year to $6.55 billion. Its earnings per share (EPS) rose 28.6% from the year-ago period to $2.74.
In a statement, Constellation CEO Joe Dominguez said that clean energy is the most important commodity in the world right now and that the opportunity to add it to the grid can help meet the nation's growing needs around artificial intelligence (AI).
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 importance of AI and the data economy to America's economic competitiveness and national security can't be overstated, and Constellation will do our part to meet the moment,” Dominguez added. "Our customers are looking for clean, emissions-free energy that they can rely on in every hour of every day, and nothing exemplifies that imperative more than our 20-year agreement with Microsoft (MSFT) to restart the Crane Clean Energy Center."
Constellation's third-quarter results came in ahead of analysts' expectations. Wall Street was anticipating revenue of $5.7 billion and earnings of $2.64 per share, according to Yahoo Finance.
As a result of its strong performance in the first nine months of its fiscal year, Constellation raised the low end of its earnings-per-share guidance for the year. The company now anticipates earnings in the range of $8 to $8.40 per share, up from its previous forecast of $7.60 to $8.40.
Why is Constellation Energy stock down?
Nuclear power stocks are taking a hit this morning after the Federal Energy Regulatory Commission (FERC) rejected a deal between Amazon.com (AMZN) and Talen Energy (TLN), according to Bloomberg. The deal would have allowed one of Amazon's data centers to use more power from an adjacent nuclear power plant owned by Talen.
"From our extensive investor conversations, very few investors, including us, expected an outright FERC rejection of the Interconnection Service Agreement (ISA)," says Jefferies analyst Julien Dumoulin-Smith, adding that the firm expected a "sharp negative share response" from Constellation, Talen, Vistra (VST) and PSEG (PEG).
Is CEG stock a buy, sell or hold?
Even with today's slide, Constellation Energy shares have nearly doubled on a year-to-date basis. And Wall Street thinks the utility stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for CEG stock is $282.56, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is Buy.
Related Content
-
I missed the 2-Year IRMAA Rule. Now, my Medicare costs are skyrocketing. What are my options?A spike in income could result in costly IRMAA charges on your Medicare premiums. We ask financial planning experts for advice.
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
How to Build Your Financial Legacy Three Piggy Banks at a Time
A wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
July CPI Report Ignites a Risk-On Rally: Stock Market TodayMarket participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
Stocks Slip Ahead of July CPI Report: Stock Market TodayThe latest inflation updates roll in this week and Wall Street is watching to see how much of an impact tariffs are having on cost pressures.
-
What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's GuideFor Americans in lower- and middle-income tax brackets, the enhanced deduction for older people reduces taxable income, shielding most of their Social Security benefits from being taxed.
