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Reasons to Add Constellation Energy (CEG) to Your Portfolio
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Constellation Energy Corp. (CEG - Free Report) , a supplier of electric power, natural gas and energy management services in the United States, is focusing on the provision of safe and reliable energy to its customers.
Let’s explore the factors that make this Zacks Rank #1 (Strong Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for CEG’s 2023 earnings per share (EPS) is pegged at $5.43, indicating an increase of 28.4% in the past 60 days. The Zacks Consensus Estimate for 2024 EPS shows an improvement of 10.1% in the past 60 days.
The company’s long-term (three to five-year) earnings growth is pegged at 23.3%.
Debt Position
Constellation Energy’s total debt to capital was 35.05% as of Jun 30, 2023, which is better than the industry’s average of 60.03%.
CEG has a current ratio of 1.45, much better than the industry’s average of 0.86. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Capital Investment & Clean Power Generation
Constellation Energy plans to invest nearly $7.6 billion during the 2023-2025 period to further strengthen its operation and generate more clean energy. Amid the ongoing conflict between Russia and Ukraine, the company decided to utilize nearly 45-47% of projected capital expenditures to acquire nuclear fuel, including additional nuclear fuel to increase inventory levels that will ensure clean power production from its nuclear units.
In June 2023, CEG announced a deal to acquire NRG Energy’s 44% ownership stake in the South Texas Project Electric Generating Station, a 2,645-megawatts (MWs) dual-unit nuclear plant. This acquisition is expected to close at the end of 2023, which will expand the clean energy production portfolio of the company.
Clean Energy Production
Constellation Energy is among the largest producers of clean electricity in the United States, producing 10% of the country’s clean energy, with a fleetwide capacity factor of more than 94% over the past decade, or about 4% higher than the industry average. The company plans to get 100% of its owned generation carbon-free by 2040.
Constellation Energy aims to increase nuclear output from its two Illinois Nuclear Plants, Byron and Braidwood, by 135 MWs. The company will invest $800 million in new equipment to increase the output from the power plants.
Price Performance
In the past year, shares of CEG have rallied 32.3% against the broader industry’s 15.6% decline.
Archrock’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at 64 cents, implying a year-over-year increase of 128.6%.
Kinetik’s long-term earnings growth rate is 17.1%. The Zacks Consensus Estimate for the company’s 2023 EPS is pegged at $1.55, indicating a year-over-year improvement of 773.9%.
The Zacks Consensus Estimate for Plain Group’s 2023 earnings is pinned at $1.24 per unit, indicating a year-over-year improvement of 44.2%. The stock boasts an average earnings surprise of 83.44% in the previous four quarters.
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Reasons to Add Constellation Energy (CEG) to Your Portfolio
Constellation Energy Corp. (CEG - Free Report) , a supplier of electric power, natural gas and energy management services in the United States, is focusing on the provision of safe and reliable energy to its customers.
Let’s explore the factors that make this Zacks Rank #1 (Strong Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for CEG’s 2023 earnings per share (EPS) is pegged at $5.43, indicating an increase of 28.4% in the past 60 days. The Zacks Consensus Estimate for 2024 EPS shows an improvement of 10.1% in the past 60 days.
The company’s long-term (three to five-year) earnings growth is pegged at 23.3%.
Debt Position
Constellation Energy’s total debt to capital was 35.05% as of Jun 30, 2023, which is better than the industry’s average of 60.03%.
CEG has a current ratio of 1.45, much better than the industry’s average of 0.86. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Capital Investment & Clean Power Generation
Constellation Energy plans to invest nearly $7.6 billion during the 2023-2025 period to further strengthen its operation and generate more clean energy. Amid the ongoing conflict between Russia and Ukraine, the company decided to utilize nearly 45-47% of projected capital expenditures to acquire nuclear fuel, including additional nuclear fuel to increase inventory levels that will ensure clean power production from its nuclear units.
In June 2023, CEG announced a deal to acquire NRG Energy’s 44% ownership stake in the South Texas Project Electric Generating Station, a 2,645-megawatts (MWs) dual-unit nuclear plant. This acquisition is expected to close at the end of 2023, which will expand the clean energy production portfolio of the company.
Clean Energy Production
Constellation Energy is among the largest producers of clean electricity in the United States, producing 10% of the country’s clean energy, with a fleetwide capacity factor of more than 94% over the past decade, or about 4% higher than the industry average. The company plans to get 100% of its owned generation carbon-free by 2040.
Constellation Energy aims to increase nuclear output from its two Illinois Nuclear Plants, Byron and Braidwood, by 135 MWs. The company will invest $800 million in new equipment to increase the output from the power plants.
Price Performance
In the past year, shares of CEG have rallied 32.3% against the broader industry’s 15.6% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same sector are Archrock Inc. (AROC - Free Report) , Kinetik Holdings Inc. (KNTK - Free Report) and Plains Group Holdings LP (PAGP - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at 64 cents, implying a year-over-year increase of 128.6%.
Kinetik’s long-term earnings growth rate is 17.1%. The Zacks Consensus Estimate for the company’s 2023 EPS is pegged at $1.55, indicating a year-over-year improvement of 773.9%.
The Zacks Consensus Estimate for Plain Group’s 2023 earnings is pinned at $1.24 per unit, indicating a year-over-year improvement of 44.2%. The stock boasts an average earnings surprise of 83.44% in the previous four quarters.