Barclays Reiterates Overweight Rating on Constellation Energy with $211 Price Target - What You Need to Know
In exciting news for investors, Barclays has reaffirmed its Overweight rating on Constellation Energy (NASDAQ:CEG) shares, setting a price target of $211. The company recently announced a 20-year power purchase agreement (PPA) with Microsoft (NASDAQ:) for the revival of Three Mile Island Unit 1, soon to be rebranded as the Crane Clean Energy Center.
This agreement is projected to significantly boost Constellation Energy's base earnings per share growth rate, increasing it from a minimum of 10% to at least 13% annually from 2024 to 2030. With approximately $1.6 billion in capital expenditures (CapEx) allocated for the project, the company aims for double-digit unlevered returns. Additionally, the revised 2024-25 capital allocation plan reveals $1.8 billion in available capital for those years, with $400 million earmarked for Crane CapEx.
The project is expected to be completed by 2028, potentially leading to earnings per share (EPS) surpassing $15 by that year. Barclays sees this announcement as a positive development not only for Constellation Energy but also for related companies like Talen Energy and Public Service Enterprise Group (NYSE:). Investors can look forward to more details on fuel procurement, regulatory timelines, and growth rate impact during Constellation Energy's upcoming conference call at 8:30 AM ET.
In conclusion, this strategic partnership and investment in clean energy could have a significant impact on Constellation Energy's financial performance and market position in the coming years. It's crucial for investors to stay informed and consider the potential opportunities presented by this development for their portfolios.