Scotiabank Modestly Bullish on Talen Energy (TLN) Amid Attractive Valuation Following Three Gas-Fired Power Plants Acquisition

Talen Energy Corporation (NASDAQ:TLN) is one of the best AI energy stocks to buy now.

Scotiabank Modestly Bullish on Talen Energy (TLN) Amid Attractive Valuation Following Three Gas-Fired Power Plants Acquisition

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On January 16, 2026, Scotiabank raised its price target on Talen Energy Corporation (NASDAQ:TLN) from $428 to $463, while reiterating its ‘Sector Perform’ rating. The update followed the company’s acquisition of three gas-fired power plants from Energy Capital Partners, an acquisition that adds roughly 2.6 GW of PJM capacity. The investment firm highlighted the attractive valuation of 6.6x EBITDA, modestly below recent deals. The valuation offers a significant discount to peers at approximately 9-11x. Furthermore, the firm raised its EBITDA and free cash flow per share estimates by approximately 25% due to strong financing and geographic diversification into Ohio and Indiana.

The deal includes $3.45 billion in total consideration that breaks down to $2.55 billion in cash and $900 million in Talen Energy Corporation (NASDAQ:TLN) stock. As a result of this acquisition, over 15% annual adjusted free cash flow per share growth is expected through 2030. While Scotiabank views the price of $1,344/kW as higher than historical transactions, the firm remains positive on the deal. However, the firm cautioned about elevated PJM exposure, which remains a risk compared to peers with ERCOT operations.

Talen Energy Corporation (NASDAQ:TLN) focuses on operating power infrastructure and producing and selling electricity, capacity, and ancillary services through its subsidiaries. The company focuses on wholesale markets and strategic expansion in the PJM Interconnection.

While we acknowledge the potential of TLN to grow, 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 TLN and that has 100x upside potential, check out our report about this cheapest AI stock.

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