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CEG Stock Trails Industry in the Past Year: Time to Buy, Hold or Sell?
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Key Takeaways
CEG's shares have fallen 24.4% in a year, trailing gains for its industry and Oil-Energy sector.
Constellation Energy benefits from data center demand and the expansion of its clean electricity portfolio.
CEG trades at a lower forward P/E than the industry, while earnings estimates have moved higher.
Constellation Energy Corporation’s (CEG - Free Report) shares have lost 24.4% over the past year against the Zacks Alternate Energy – Other industry’s growth of 21.7% and the Zacks Oil-Energy sector’s rally of 21.9%.
The weakness in the share price can be attributed to investor concern over the Calpine acquisition, which includes high leverage and share dilution. In addition, a bottleneck in transmission project completion can postpone the restart of the 835-megawatt (“MW”) Three Mile Island plant, which is also having an negative impact on price.
Despite the weakness in share price, the company stands to benefit from growing data center demand, supported by its reliable nuclear fleet and the expansion of the clean electricity generation portfolio through acquisition and organic means.
Price Performance (One year)
Image Source: Zacks Investment Research
Another stock, Vistra Corp. (VST - Free Report) , has multi-fuel power generation capabilities, with a significant volume of electricity production coming from nuclear power plants. Vistra’s shares also declined 20.9% in the past year.
Given the current underperformance in price, should you consider adding Constellation Energy to your portfolio? Let's examine the factors in detail and assess the investment prospects.
Tailwinds for CEG Stock Amid Weakness in Share Price
Constellation Energy is well-positioned to benefit from rising clean energy demand through its diversified generation portfolio, anchored by one of the nation's largest nuclear fleets. The company's focus on zero-carbon power generation underscores its leadership in reliability and sustainability, with the nuclear fleet achieving a strong 92.3% capacity factor in the first quarter of 2026.
Constellation Energy is strengthening its nuclear operations and filed an application to the Nuclear Regulatory Commission to extend the operations of Ginna Clean Energy Center and Nine Mile Point Unit 1 reactors in upstate New York to 2049.
CEG is broadening clean electricity generation assets through organic and acquisitions, which enhances portfolio diversity and positions itself for sustained growth in a cleaner, more sustainable energy market. Constellation Energy signed a long-term agreement with Pine Creek RNG to acquire a minority stake in five operating renewable natural gas facilities. The partnership expands Constellation Energy's clean energy portfolio by supporting 1.5 million MMBtus of existing annual RNG production and creating opportunities to develop an additional 3.0 million MMBtus per year.
Constellation Energy recently signed a long-term nuclear power purchase agreement with Walmart to supply nearly 176 megawatts of emissions-free electricity from its Dresden Clean Energy Center in Illinois. The 15-year agreement, beginning in 2029 and 2030, supports planned nuclear uprates, strengthens grid reliability, expands clean energy access and reinforces Constellation Energy's long-term growth and infrastructure investment strategy.
Constellation Energy’s earnings growth is supported by its strategic investments and commitment to expanding the clean energy generation portfolio. The company plans to invest about $5.7 billion in 2026 and $4.7 billion in 2027, with roughly 29% allocated to nuclear fuel acquisition to ensure reliable, clean power generation.
Headwinds for Constellation Energy
Constellation Energy's premium valuation reflects expectations of strong AI-driven electricity demand, favorable power prices and solid operational performance, making the stock vulnerable to any slowdown in these trends. The company also faces risks from nuclear plant operations, regulatory changes, wholesale power price volatility, weather impacts, debt and integration challenges following the Calpine acquisition and uncertainty surrounding future nuclear tax incentives.
Constellation Energy’s Earnings Estimates Moving Up
The Zacks Consensus Estimate for Constellation Energy’s 2026 and 2027 earnings per share indicates an increase of 0.86% and 0.52%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
The same for Vistra’s 2026 earnings per share indicates an increase of 3.93% and the 2027 estimate implies a decline of 2.35% in the past 60 days.
CEG’s Debt Usage Is Lower Than Industry Peers
Utility operations are capital-intensive and the companies operating in this space need to borrow from the market to fund their long-term projects. Companies borrow when their internal sources of funds are not sufficient to fulfill their long-term requirement.
The debt-to-capital of Constellation Energy is 43.05% compared with its industry’s 55.3%. The ratio indicates CEG is utilizing much lower debts compared with its peers to run operations.
Image Source: Zacks Investment Research
NextEra Energy (NEE - Free Report) produces a large volume of clean energy and has initiatives to add more clean energy sources to its generation portfolio. NEE also utilizes debt to run its operations and the current debt-to-capital level is 61.04% higher than the industry average.
CEG Stock Returns Higher Than the Industry
Return on equity (“ROE”) is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The current ROE of the company indicates that it is using shareholders’ funds more efficiently than peers.
Constellation Energy’s trailing 12-month ROE of 16.81% is better than the industry average of 7.15%.
Image Source: Zacks Investment Research
NextEra Energy’s ROE is currently pegged at 12.25%, which indicates that it is utilizing funds better than peers in the industry.
CEG Stock Trading at a Discount
Constellation Energy is currently trading at a forward 12-month P/E basis (P/E F12 M) of 18.86X, a discount compared with its industry’s 24.99X on P/EF12 M.
Image Source: Zacks Investment Research
Summing Up
Constellation Energy is well-equipped to benefit from rising demand for clean energy, with its robust generation portfolio providing reliable and efficient power to support growing electricity consumption.
Despite recent share price weakness, Constellation Energy's strong fundamentals and intact long-term growth drivers support its investment case. Coupled with a cheaper valuation and improving earnings prospects, the stock remains a wise holding for long-term investors.
View the Zacks #1 Rank List
Image: Bigstock
CEG Stock Trails Industry in the Past Year: Time to Buy, Hold or Sell?
Key Takeaways
Constellation Energy Corporation’s (CEG - Free Report) shares have lost 24.4% over the past year against the Zacks Alternate Energy – Other industry’s growth of 21.7% and the Zacks Oil-Energy sector’s rally of 21.9%.
The weakness in the share price can be attributed to investor concern over the Calpine acquisition, which includes high leverage and share dilution. In addition, a bottleneck in transmission project completion can postpone the restart of the 835-megawatt (“MW”) Three Mile Island plant, which is also having an negative impact on price.
Despite the weakness in share price, the company stands to benefit from growing data center demand, supported by its reliable nuclear fleet and the expansion of the clean electricity generation portfolio through acquisition and organic means.
Price Performance (One year)
Image Source: Zacks Investment Research
Another stock, Vistra Corp. (VST - Free Report) , has multi-fuel power generation capabilities, with a significant volume of electricity production coming from nuclear power plants. Vistra’s shares also declined 20.9% in the past year.
Given the current underperformance in price, should you consider adding Constellation Energy to your portfolio? Let's examine the factors in detail and assess the investment prospects.
Tailwinds for CEG Stock Amid Weakness in Share Price
Constellation Energy is well-positioned to benefit from rising clean energy demand through its diversified generation portfolio, anchored by one of the nation's largest nuclear fleets. The company's focus on zero-carbon power generation underscores its leadership in reliability and sustainability, with the nuclear fleet achieving a strong 92.3% capacity factor in the first quarter of 2026.
Constellation Energy is strengthening its nuclear operations and filed an application to the Nuclear Regulatory Commission to extend the operations of Ginna Clean Energy Center and Nine Mile Point Unit 1 reactors in upstate New York to 2049.
CEG is broadening clean electricity generation assets through organic and acquisitions, which enhances portfolio diversity and positions itself for sustained growth in a cleaner, more sustainable energy market. Constellation Energy signed a long-term agreement with Pine Creek RNG to acquire a minority stake in five operating renewable natural gas facilities. The partnership expands Constellation Energy's clean energy portfolio by supporting 1.5 million MMBtus of existing annual RNG production and creating opportunities to develop an additional 3.0 million MMBtus per year.
Constellation Energy recently signed a long-term nuclear power purchase agreement with Walmart to supply nearly 176 megawatts of emissions-free electricity from its Dresden Clean Energy Center in Illinois. The 15-year agreement, beginning in 2029 and 2030, supports planned nuclear uprates, strengthens grid reliability, expands clean energy access and reinforces Constellation Energy's long-term growth and infrastructure investment strategy.
Constellation Energy’s earnings growth is supported by its strategic investments and commitment to expanding the clean energy generation portfolio. The company plans to invest about $5.7 billion in 2026 and $4.7 billion in 2027, with roughly 29% allocated to nuclear fuel acquisition to ensure reliable, clean power generation.
Headwinds for Constellation Energy
Constellation Energy's premium valuation reflects expectations of strong AI-driven electricity demand, favorable power prices and solid operational performance, making the stock vulnerable to any slowdown in these trends. The company also faces risks from nuclear plant operations, regulatory changes, wholesale power price volatility, weather impacts, debt and integration challenges following the Calpine acquisition and uncertainty surrounding future nuclear tax incentives.
Constellation Energy’s Earnings Estimates Moving Up
The Zacks Consensus Estimate for Constellation Energy’s 2026 and 2027 earnings per share indicates an increase of 0.86% and 0.52%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
The same for Vistra’s 2026 earnings per share indicates an increase of 3.93% and the 2027 estimate implies a decline of 2.35% in the past 60 days.
CEG’s Debt Usage Is Lower Than Industry Peers
Utility operations are capital-intensive and the companies operating in this space need to borrow from the market to fund their long-term projects. Companies borrow when their internal sources of funds are not sufficient to fulfill their long-term requirement.
The debt-to-capital of Constellation Energy is 43.05% compared with its industry’s 55.3%. The ratio indicates CEG is utilizing much lower debts compared with its peers to run operations.
Image Source: Zacks Investment Research
NextEra Energy (NEE - Free Report) produces a large volume of clean energy and has initiatives to add more clean energy sources to its generation portfolio. NEE also utilizes debt to run its operations and the current debt-to-capital level is 61.04% higher than the industry average.
CEG Stock Returns Higher Than the Industry
Return on equity (“ROE”) is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The current ROE of the company indicates that it is using shareholders’ funds more efficiently than peers.
Constellation Energy’s trailing 12-month ROE of 16.81% is better than the industry average of 7.15%.
Image Source: Zacks Investment Research
NextEra Energy’s ROE is currently pegged at 12.25%, which indicates that it is utilizing funds better than peers in the industry.
CEG Stock Trading at a Discount
Constellation Energy is currently trading at a forward 12-month P/E basis (P/E F12 M) of 18.86X, a discount compared with its industry’s 24.99X on P/EF12 M.
Image Source: Zacks Investment Research
Summing Up
Constellation Energy is well-equipped to benefit from rising demand for clean energy, with its robust generation portfolio providing reliable and efficient power to support growing electricity consumption.
Despite recent share price weakness, Constellation Energy's strong fundamentals and intact long-term growth drivers support its investment case. Coupled with a cheaper valuation and improving earnings prospects, the stock remains a wise holding for long-term investors.
The stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.