Why Constellation Energy Stock Is Sliding After an Earnings Beat
Constellation Energy stock is lower Monday as a regulatory decision offsets the utility company's solid third-quarter earnings results.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
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).
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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
-
Quiz: Do You Know How to Avoid the "Medigap Trap?"Quiz Test your basic knowledge of the "Medigap Trap" in our quick quiz.
-
5 Top Tax-Efficient Mutual Funds for Smarter InvestingMutual funds are many things, but "tax-friendly" usually isn't one of them. These are the exceptions.
-
AI Sparks Existential Crisis for Software StocksThe Kiplinger Letter Fears that SaaS subscription software could be rendered obsolete by artificial intelligence make investors jittery.
-
5 Top Tax-Efficient Mutual Funds for Smarter Investing
Mutual funds are many things, but "tax-friendly" usually isn't one of them. These are the exceptions.
-
Why Invest In Mutual Funds When ETFs Exist?Exchange-traded funds are cheaper, more tax-efficient and more flexible. But don't put mutual funds out to pasture quite yet.
-
Social Security Break-Even Math Is Helpful, But Don't Let It Dictate When You'll FileYour Social Security break-even age tells you how long you'd need to live for delaying to pay off, but shouldn't be the sole basis for deciding when to claim.
-
I'm an Opportunity Zone Pro: This Is How to Deliver Roth-Like Tax-Free Growth (Without Contribution Limits)Investors who combine Roth IRAs, the gold standard of tax-free savings, with qualified opportunity funds could enjoy decades of tax-free growth.
-
One of the Most Powerful Wealth-Building Moves a Woman Can Make: A Midcareer PivotIf it feels like you can't sustain what you're doing for the next 20 years, it's time for an honest look at what's draining you and what energizes you.
-
Stocks Make More Big Up and Down Moves: Stock Market TodayThe impact of revolutionary technology has replaced world-changing trade policy as the major variable for markets, with mixed results for sectors and stocks.
-
I'm a Wealth Adviser Obsessed With Mahjong: Here Are 8 Ways It Can Teach Us How to Manage Our MoneyThis increasingly popular Chinese game can teach us not only how to help manage our money but also how important it is to connect with other people.
-
Looking for a Financial Book That Won't Put Your Young Adult to Sleep? This One Makes 'Cents'"Wealth Your Way" by Cosmo DeStefano offers a highly accessible guide for young adults and their parents on building wealth through simple, consistent habits.
