Constellation Energy Corp (CEG.N) Model Update Ahead of Q2 Earnings

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Constellation Energy Corp (CEG.N) Model Update Ahead of Q2 Earnings

V analyses to account

for lower counterparty risk once the projects are in flight. This approach yields $269/share. 3) P/E: We applied a 15x P/E

multiple on our 2028E consolidated EPS estimate to get $259/share.

Risks

We apply a High Risk rating to CEG as the stock is High Risk per our quantitative model. We expect the stock to remain higher

risk as market expectations are expected to evolve related to merchant power sales to hyperscalers, the company works to

execute on power plant restarts, and power price outlooks remain volatile.

Risks to the CEG stock deviating from our target price include:

- Commodity Price Volatility & Hedging Risk: Constellation has material exposure to power, gas, uranium, and oil prices which

are inherently volatile and difficult to predict. Although partially offset by hedging, changes to commodity prices could drive

material changes to earnings and free cash flow. Constellation's hedging strategy could introduce new risks.

- Policy Risk: Constellation is subsidized by various state and federal credits for nuclear generation, and could be subject to

higher exposure to volatile returns if these subsidies roll off earlier than expected. Negative political, regulatory, or public

sentiment toward behind-the-meter deals with datacenters could reduce Constellation's possibility of contracting deals

which could diminish future growth profile. Sentiment towards nuclear and oil/gas generation could impact Constellation's

generation profile and operating/capital allocation decisions.

- Execution Risk: The Crane (TMI) restart is exposed to permitting/licensing risk, financing risk, and operational risk. A delayed