Constellation Energy Stock Rises as Bank of America Upgrades the Shares

Key Takeaways

Constellation Energy (

CEG

) shares rose Thursday after Bank of America analysts upgraded the energy company’s stock and lifted their price target to near Wall Street’s average.

The analysts upgraded their rating of Constellation stock to “buy” from “neutral” and raised their
price target
to $269, a bit below the Visible Alpha consensus near $280, from $237. (The stock finished Wednesday just under $237.)

They pointed rising power demand and the potential for more exclusive agreements to power data centers like Constellation
announced earlier this year
with Microsoft (

MSFT

).

Constellation Provides ‘Unique Investment Opportunity’ in Nuclear Industry

The analysts called Constellation a “unique investment opportunity” and said it has a number of positives like its recent growth, business model, and a “compelling valuation relative to peers.”

Constellation remains undervalued despite “changing dynamics in the power market” like rising energy prices, which drove Constellation and
other nuclear stocks higher
earlier this year, and demand for power that the analysts see outpacing supply.

A number of analysts
grew more bullish
on Constellation after the Microsoft deal, which will see Unit 1 of the Three Mile Island complex in Pennsylvania restarted to provide power to a Microsoft data center. The BofA analysts also noted risks including the possibility of lower prices, uranium supply chain issues, and regulatory uncertainty.

Last month, the
Federal Energy Regulatory Commission (FERC)
temporarily blocked
a data center power deal between Talen Energy (

TLN

) and Amazon (

AMZN

). The analysts wrote Thursday that the remaining uncertainty could delay future deals between energy companies and tech giants.

Constellation shares, which were recently up nearly 3%, have more than doubled in value since the start of 2024.

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