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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Constellation generates and sells electricity from the largest US nuclear fleet plus, since January 2026, Calpine's gas and geothermal plants, about 55 GW in total. It sells power to grid markets, utilities and about 2.5 million retail and business accounts, including long-term contracts with technology companies such as Microsoft and Meta. [S2][S26][S39]
Revenue comes from selling generated and purchased power and natural gas to wholesale markets and commercial, industrial and residential customers, from capacity payments for plant availability, and from nuclear support such as state zero-emission credits and the federal production tax credit. [S2][S3][S32]
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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Valuation and assumptionsConstellation owns the largest US nuclear fleet, whose output is becoming scarcer and more valuable as data-center demand grows. The tension is price: at $266 the stock needs cash flows about a third above my base case, or a much lower discount rate.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: Shows the price needs either a ~7.6% discount rate on base cash flows or about a third more cash flow than the base case.
Roughly a third or more of earnings depends on uncontracted power and capacity prices in politically exposed markets. Capacity caps, state intervention or weaker demand would compress that layer, and the nuclear tax-credit floor expires after 2032.
A federal tax credit for existing nuclear plants that pays up to a set amount per MWh, shrinking as the plant's realized power price rises. It acts as an inflation-indexed revenue floor.
In this report: It underpins Constellation's 'base' earnings, but under current law it expires for tax years after 2032.
An auction in which grid operators pay power plants to commit to being available during peak demand, priced in dollars per megawatt per day.
In this report: PJM capacity prices rose more than tenfold and are now capped by regulators, making them a large and politically exposed source of profit.
It sells nuclear and gas power to grid markets and 2.5 million accounts. Profit per MWh depends on energy prices, capacity payments and a tax-credit floor; costs are mostly fixed.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: Nuclear costs are mostly fixed, so small changes in realized power prices move profit sharply.
On my base cash flows the price implies about a 7.6% cost of equity, or 2029 cash flow near $8bn versus management's $5.75-6.5bn.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: Shows the price needs either a ~7.6% discount rate on base cash flows or about a third more cash flow than the base case.
Operating cash flow after maintenance capital spending, nuclear fuel, interest and taxes, but before discretionary growth investment.
In this report: It is the owner-earnings measure used in the DCF: about $8.4bn over 2026-27 and $11.5-13.0bn over 2028-29 per management.
Strong, strengthening business; probability-weighted value about $200 implies roughly 3% a year over five years, below a 9.4% hurdle.
The weighted average required return of a company's debt and equity providers, used to discount cash flows to the firm.
In this report: The choice between infrastructure-like and cyclical discount rates explains most of the gap between this report and the market price.
Realized price on open nuclear MWh: about $0.32 of EPS per $1/MWh, and it sets terminal value.
An auction in which grid operators pay power plants to commit to being available during peak demand, priced in dollars per megawatt per day.
In this report: PJM capacity prices rose more than tenfold and are now capped by regulators, making them a large and politically exposed source of profit.
Discount rate: 100bps moves base value by about $25-34 per share.
The weighted average required return of a company's debt and equity providers, used to discount cash flows to the firm.
In this report: The choice between infrastructure-like and cyclical discount rates explains most of the gap between this report and the market price.
Regulators keep capping prices, contracting slows, and open output reprices toward the tax-credit floor, which then expires.
A federal tax credit for existing nuclear plants that pays up to a set amount per MWh, shrinking as the plant's realized power price rises. It acts as an inflation-indexed revenue floor.
In this report: It underpins Constellation's 'base' earnings, but under current law it expires for tax years after 2032.
Management's 2028-29 cash-flow range is met, then growth fades as new supply moderates prices.
Operating cash flow after maintenance capital spending, nuclear fuel, interest and taxes, but before discretionary growth investment.
In this report: It is the owner-earnings measure used in the DCF: about $8.4bn over 2026-27 and $11.5-13.0bn over 2028-29 per management.
Several GW of premium contracts and uncapped PJM pricing turn the fleet into contracted infrastructure.
Quarterly new PPA megawatts and premiums; sustained signings above 1 GW a year would weaken this assessment.
PJM market design after the 2029/30 auction; removing caps would support higher values.
An auction in which grid operators pay power plants to commit to being available during peak demand, priced in dollars per megawatt per day.
In this report: PJM capacity prices rose more than tenfold and are now capped by regulators, making them a large and politically exposed source of profit.
2028-29 FCFbG guidance; a cut below $11.5bn would support this assessment.
Operating cash flow after maintenance capital spending, nuclear fuel, interest and taxes, but before discretionary growth investment.
In this report: It is the owner-earnings measure used in the DCF: about $8.4bn over 2026-27 and $11.5-13.0bn over 2028-29 per management.
Not established from primary sources: executive compensation, insider ownership and succession (2026 proxy not read); debt maturity schedule, fixed/floating mix and covenants; CEG's cleared PJM capacity in MW; segment EBITDA (so no sum-of-the-parts); customer concentration above 10% of revenue; nuclear fuel contract coverage; stock-based compensation amount; where PTC benefits sit in the income statement; the cause of negative 2021-2024 operating cash flow (receivables-facility classification is unverified). Adjusted EBITDA, ROIC, pro forma net debt, the 2029 total-EPS range and all DCF values are analyst estimates. The risk-free rate is an assumption. The price is an intraday quote from 22 September 2026.
These model scenarios depend on their inputs. Review the assumptions and supporting evidence alongside the implied values.
earnings multiple v2 · as of 2026-10-18
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