Talen Energy Corp. (TLN): Takeaways from 2Q and Earnings Callback: Constructive PJM Fundamentals and Shareholder Returns, Buy

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Equity Research

10 August 2026 | 12:03AM EDT

Talen Energy Corp. (TLN)

Takeaways from 2Q and Earnings Callback: Constructive PJM Fundamentals and

Shareholder Returns, Buy

TLN

12m Price Target: $509.00

Price: $347.71

Upside: 46.4%

On August 7, we held a virtual investor meeting with Talen’s

President, Mr. Terry Nutt and CFO, Mr. Cole Muller, after the release

of 2Q26 results. Management emphasized high confidence in PJM’s

tightening supply-demand dynamics and that the eventual

compression of the PPL basis discount could represent a significant

FCF/share tailwind, as transmission upgrades finish and load growth

materializes. Additionally, management views the recent PJM RBP

filing to the FERC as a positive milestone that establishes rule clarity

and emphasized bilateral deals as a multi-year investment cycle.

Talen also highlighted its front-of-the-meter hybrid strategy, the

accelerated ramp of the AWS contract, and their commitment to

returning at least 70% of free cash flow to shareholders via

buybacks. We remain constructive on TLN, given its levered

exposure to improving PJM power prices and narrowing discount to

other PJM sub-regions, its accelerated ramp of the AWS PPA at

Susquehanna, and commitment to capital allocation and

shareholder returns. We update our estimates to incorporate 2Q26

results and our price target increases to $509, implying 50% total

return.

BUY

Carly Davenport

Goldman Sachs & Co. LLC

Beatriz Abreu, CFA

Goldman Sachs & Co. LLC

Jaya Patel

Goldman Sachs & Co. LLC

Key Data _____________________________________

Market cap: $16.5bn

Enterprise value: $25.3bn

3m ADTV: $309.5mn

United States

Americas Utilities

M&A Rank: 3

GS Forecast __________________________________

12/25

12/26E

12/27E

Revenue ($ mn) New

2,626.0

4,700.1

5,258.8

5,769.8

Revenue ($ mn) Old

2,626.0

4,651.2

5,397.5

5,775.8

EBITDA ($ mn)

1,035.0

2,217.8

2,826.1

3,276.5

EBIT ($ mn)

713.0

1,757.1

2,246.0

2,703.8

EPS ($) New

9.06

22.70

31.62

43.09

EPS ($) Old

9.06

21.11

29.71

39.32

P/E (X)

33.4

15.3

11.0

8.1

Dividend yield (%)

0.0

Net debt/EBITDA (X)

5.9

4.0

3.0

2.3

6/26

9/26E

12/26E

3/27E

2.37

7.21

6.86

7.17

EPS ($)

12/28E

GS Factor Profile ______________________________

Growth

…