Constellation Energy (CEG) PT Raised to $263 at BofA Securities

BofA Securities analyst Paul Zimbardo raised the price target on Constellation Energy (NASDAQ: CEG) to $263.00 (from $208.00) while maintaining a Neutral rating.

The analyst comments "We reiterate our Neutral rating on Constellation Energy Corp (CEG). On 9/20, CEG announced that will restart Unit 1 of the Three Mile Island (TMI) nuclear facility, providing the resulting output to a Microsoft owned data center. This restart will cost approx. $1.6Bn (including fuel), with the plant scheduled to restart in 2028. While CEG did not disclose the financial details of the supply contract, it did highlight that base earnings growth over the ’24-‘30 period will increase from 10% to 13%, that the project exceeds its double-digit return threshold, and that it qualifies for the 45Y new nuclear tax credit. The above-market price contract at TMI is a clearly positive development; however, we see no obvious similar opportunities across the portfolio, so the step function in EPS growth from this type of project is likely to be one-time in nature."

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