Citi Downgrades Constellation Energy (CEG) to Neutral, Raises Price Target to $318

On June 4, analysts at Citi downgraded Constellation Energy Corporation (NASDAQ:CEG) to a ‘Neutral’ from a ‘Buy.’ The downgrade comes after a big rise in the company’s stock price and the announcement of a deal with Meta Platforms (NASDAQ:META). The stock has jumped 25.56% this year and 50% over the past year, increasing its market value to $95.47 billion.

A portrait of a woman entrepreneur in a clean energy plant, an inspiration for others.

The analysts, however, raised their price target to $318, up from the previous $232. The downgrade and price adjustment affirm an updated valuation. The adjustments consider Constellation Energy’s prospect of signing data center deals at approximately $80 per megawatt for its nuclear plants. Citi’s new valuation also assumes a 70% chance of the company inking deals for its 22-gigawatt flees, with licenses poised to expire in 2045.

The company has already entered a 20-year power purchase agreement to support Meta Platform’s clean energy goals. The company will supply the social media giant with renewable energy from its Clinton Clean Energy Center. Amid the strong demand, the company is exploring the possibility of constructing an advanced nuclear reactor and small module reactor to enhance Clinton’s output to 30 megawatts.

Constellation is a leading producer and supplier of reliable, clean, carbon-free energy to millions of homes, institutional customers, and the public sector.

While we acknowledge the potential of Constellation Energy Corporation (NASDAQ:CEG) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CEG and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.