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Constellation's Q1 Earnings Coming Up: Buy, Sell or Hold the Stock?

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Constellation Energy Corporation (CEG - Free Report) is expected to deliver improvements in its earnings per share when it reports first-quarter 2025 results on May 6, before market open. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The Zacks Consensus Estimate for CEG’s first-quarter revenues is pegged at $5.92 billion, indicating a decline of 3.87% from the year-ago reported figure.

The Zacks Consensus Estimate for the company’s first-quarter earnings is pegged at $2.14 per share, indicating a 17.58% increase from the year-ago reported figure.

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Image Source: Zacks Investment Research

CEG Stock’s Positive Earnings Surprise

Constellation Energy surpassed earnings expectations in each of the past four quarters, with the average surprise being 10.16%.

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Image Source: Zacks Investment Research

What the Zacks Model Unveils

Our model predicts a likely earnings beat for Constellation Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is the case here, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Constellation Energy has an Earnings ESP of +2.18%.

Zacks Rank: CEG currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other stocks from the same sector having the favorable combination for an earnings beat this season are APA Corporation (APA - Free Report) , Delek US Holdings (DK - Free Report) and Helmerich & Payne (HP - Free Report) , all currently having a Zacks Rank of 3. Earnings ESP of APA, DK and HP are currently pegged at +4.52, +18.05% and +14.61%, respectively.

Factors Likely to Have Shaped CEG’s Q1 Earnings

Constellation Energy primarily generates power through its strong nuclear fleet and has taken strategic steps to secure a reliable supply of nuclear fuel. The company is consistently achieving a very high nuclear operating capacity factor, which ensures a consistent high volume of clean energy supply for customers. This is likely to have had a positive impact on first-quarter earnings.

Beyond nuclear operations, Constellation Energy is actively expanding its renewable energy portfolio. This strategic focus not only diversifies its energy mix but also supports long-term earnings growth. By balancing investments between maintaining its leading nuclear capabilities and expanding into renewables, the company positions itself to thrive in an evolving energy market focused on sustainability. These ongoing strategic initiatives are expected to have a positive impact on first-quarter earnings.

CEG’s Price Performance

CEG’s shares have gained 7.3% in the past six months compared with the industry’s rally of 5.4%.

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Image Source: Zacks Investment Research

CEG Stock Trading at a Premium

Constellation Energy is currently valued at a premium compared to its industry on a forward 12-month P/E basis.

 

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Image Source: Zacks Investment Research

Investment Thesis

Constellation Energy’s strategic investment plans and its focus on continuing to expand its renewable portfolio drive its earnings performance. The company is an industry leader in operating nuclear plants safely, efficiently and reliably.

The company is also benefiting from systematic acquisitions, which are expanding its clean energy generation capacity and meeting the rising demand from its customers.

Wrapping Up

Constellation Energy is well-positioned to capitalize on the rising demand for clean energy across its service areas, a trend largely fueled by the rapid expansion of AI-powered data centers. With its robust generation capacity, the company is equipped to meet this rising energy demand effectively.

The existing shareholders stand to benefit from ongoing dividends, share repurchase programs, and increasing earnings projections, all of which contribute to the company’s strong financial outlook. For existing shareholders, maintaining their position in this stock is a prudent strategy.

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