Constellation Energy Just Landed a Major Meta Platforms Deal. How Should You Play the Nuclear Energy Stock Here?
Constellation Energy (CEG) shares are inching up on Tuesday, June 3 after Meta Platforms (META) announced a 20-year nuclear power agreement with the largest U.S. producer of carbon-free energy.
Meta has agreed to buy more than 1 gigawatt of energy, or the entire output from CEG's nuclear facility in Illinois, to meet the ever-increasing power demand of its AI data centers.
The agreement will commence in June 2027. Including today's gains, Constellation Energy stock is up nearly 100% versus its year-to-date low in early April.
What Meta's Deal Means for Constellation Energy Stock
Meta's long-term power purchase agreement (PPA) is a meaningful positive for CEG investors since it ensures a stable revenue stream for the nuclear energy company.
Additionally, this deal secures the future of the company's Clinton facility, which faced potential closure after its zero-emission credits expire in 2027.
Onboarding a tech titan reinforces Constellation Energy's position in the global market for carbon-free energy, which could drive other artificial intelligence companies to its nuclear facilities as well.
All in all, Meta's announcement not only improves visibility into CEG's future earnings and its overall growth prospects – it actually strengthens the case for nuclear power as a reliable source for AI data centers as well.
Note that Constellation Energy stock also currently pays a dividend that yields 0.5%.
UBS Sees Significant Further Upside in CEG Shares
UBS analysts raised their price target on Constellation Energy shares in the wake of Meta's 20-year power purchase agreement on Tuesday.
They expect CEG to win more PPA deals in the back half of this year, which, they believe, could drive the company's share price further up to $360, indicating potential upside of another 12% from here.
Plus, Constellation's $16 billion acquisition of Calpine Corporation that's expected to close by the end of 2025 may also serve as tailwind for the nuclear energy stock, the investment firm told clients in a research note today.
Other Wall Street Firms Recommend Caution on Constellation Energy
Investors are still recommended caution in buying Constellation Energy stock at current levels as other Wall Street analysts are not as bullish on the Nasdaq-listed firm.
While the consensus rating on CEG shares currently sits at 'Strong Buy,' the mean target of about $303 indicates potential downside of some 3% from current levels.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBC
an hour ago
- CBC
Hudson's Bay landlords don't want Ruby Liu to move in, but retailer still has a shot
Social Sharing A group of Hudson's Bay's landlords don't want to transfer more than two dozen leases to B.C. billionaire Weihong (Ruby) Liu, but the department store still has a chance to get its way. The Bay, which filed for creditor protection in March, ran a process over the last several months to find buyers for leases belonging to it and Saks Canada. It agreed to sell up to 28 spaces to Liu. Three leases were transferred to her without any hiccups because they're in B.C. malls she owns, but another 25 are at properties held by a who's who of Canadian commercial real estate firms. Landlords for 23 of those sites oppose the transfer. Several have said in court they've been "very troubled" with their interactions with Liu and have had "no productive discussions, no meaningful disclosure." Liu insists if the court hands her the leases, landlords will warm to her and her plan to open a new department store in their properties. While the disagreement could serve as a roadblock to the Bay closing on its agreement with Liu, lawyers not involved in the case say the retailer has another route it can take to get a deal done. That route lies in changes to the Companies' Creditors Arrangement Act (CCAA) — Canada's main insolvency law — made in 2009, said Jeff Lee, a Saskatoon-based partner at MLT Aikins LLP. The changes laid out three criteria courts must consider when asked to assign leases to a new tenant. WATCH | Who is Ruby Liu? Who is Hudson's Bay benefactor and billionaire Ruby Liu? 3 days ago Duration 6:16 Ruby Liu, a billionaire with a big vision, now has legal permission to take over the leases of three former Hudson's Bay department stores located at three malls already under her ownership. For more on the new Bay benefactor, we're joined by retail analyst Carl Boutet. The first is whether or not the sale has the support of the monitor, a court-appointed, independent third party which helps guide businesses through creditor protection. In the Bay's case, the monitor is Alvarez & Marsal. It has yet to reveal whether it supports the Liu deal and did not respond to requests for comment. "Before any court application is brought forward, typically the company will test that out with them," Lee said. "They're not going to just sort of fly in blind and hope for the best." The second aspect for the court to mull is whether the proposed new tenant is suitable. Lee said that's determined by looking at whether they can perform the duties of the tenant and pay rent. Liu, who made her money in Chinese real estate, appears to have deep pockets but her experience comes from being a landlord rather than a tenant. The final aspect the court will consider is whether a transfer of a lease to Liu is "appropriate." Lee said people should think of it as asking this question: "Is what's proposed for this post-assignment lease relationship what people signed up for, or are they seeking to rewrite the lease or change the playing field so radically that it's not appropriate?" WATCH | What went wrong for Hudson's Bay: What went wrong with Hudson's Bay? 3 months ago Duration 5:49 That's where much of the tension could lie in the Bay case. "You can't go into CCAA as a tenant and then force your landlords to renegotiate their leases as a result," said Peter Tolensky, a Vancouver-based partner at Lawson Lundell LLP. The Canadian Press obtained a document last week that Liu's lawyer sent landlords outlining her plans. It says she will take on the leases on an "as is, where is" basis but doesn't mention the dining, entertainment, children's and fitness experiences she's told media she'd like to include in her department stores. It's unclear whether the leases allow for uses other than a Bay-like department store. Some lenders owed more than $100M A court faced with a request to reassign leases will weigh this context and think about whether "the landlord's world is being turned upside down by having this new tenant," said Geoffrey Dabbs, a B.C.-based founding partner at Gehlen Dabbs Cash. "The more it's a minor inconvenience for the landlord, the more likely the judge will order it," he said. While the Bay hasn't said whether it will seek an assignment, it's likely because any company in creditor protection has a duty to show the court it's doing its best to pay back companies and people it owes money to, Dabbs said. The Bay has a 26-page list of creditors, with some lenders owed more than $100 million each. Liquidation sales and a deal to sell the Bay trademarks to Canadian Tire for $30 million have put a dent in what's owed but selling leases to Liu would also help. Anyone who made an offer for leases had to make a deposit of 10 per cent of their estimated purchase price. Court documents show Liu made a deposit of $9.4 million, in addition to $6 million for the three approved leases, which would equate to a purchase price of $100 million for 28 leases. When a deal like this is reached, Dabbs said a company typically seeks landlord consent because commercial leases tend to have provisions stopping anyone from transferring a lease without a property owner agreeing. It's not uncommon for landlords to object because any leases that can't be sold and aren't assigned get turned back over to property owners who can choose how to fill them and under what terms. These are anchor leases, Tolensky noted. "So they're probably very favourable to the Bay or to the tenant in a lot of respects," Tolensky said, alluding to the fact that anchor tenants are often given attractive rents or terms. Thus, it's more advantageous for landlords to get their properties back, said Monica Beffa, founder of an Oakville, Ont., law firm. If they do, they can then charge higher rents, develop them for entirely new uses such as residential units or break them up into smaller parcels that can be rented by a wide array of tenants. If they don't and a court assigns the leases to Liu, landlords will likely be watching her closely to ensure she doesn't violate any terms of the agreement. Dabbs said: "The landlord may be cranky, if the tenant breaches, but put it this way, they don't want to rely on that.
CTV News
an hour ago
- CTV News
Lack of funding for e-buses could cause some to skip school
The E-Lion is the only zero-emission school bus currently on the market and is made entirely in Quebec. With the school year just coming to an end, the start of the 2025 school year is already shaping up to be complicated. The Quebec school bus federation (FTA) warns that many school buses are at risk of remaining parked in August due to a funding issue related to the shift to electric vehicles. A survey conducted by the FTA among its members reveals that, for 87 per cent of its members, electric routes were not profitable in the year that just ended. In an interview with The Canadian Press, the federation's executive director, Luc Lafrance, explains that the switch to electric vehicles significantly increases operating costs. In total, the FTA estimates that an electric bus costs an average of $14,000 more to operate than a gas-powered vehicle. Approximately 1,300 of the federation's 8,000 routes currently run on electricity. Beyond installation costs, the transport company is also responsible for maintaining charging stations, and electric vehicles require more expensive expertise to repair in the event of a problem. Repairs also tend to take longer, which pushes transport companies to have more replacement vehicles in case of a glitch. When the Quebec government mandated the purchase of electric vehicles in 2021, financial assistance was available to fund the transition. This support has been reduced from $12,900 to $5,000 this year, which is not enough, according to Lafrance. The funding cuts are causing a $12 million shortfall for transport companies, the FTA said in a statement. Lafrance said he met with the Minister of Education on Friday to express his concerns. The ministry did not immediately respond to a request for comment. This report by The Canadian Press was first published in French on June 28, 2025.
CBC
an hour ago
- CBC
DHL Express Canada strike, lockout to end after workers ratify new agreement, union says
Canada's largest private sector union says a three-week lockout and strike at DHL Express Canada is due to end because workers ratified a new agreement. Unifor said Saturday that the four-year agreement reached with the delivery company was ratified with 72 per cent support from members. It includes a 15.75 per cent wage hike, pension increases for hourly workers and a new pension for owner-operators. The agreement also features increases to short- and long-term disability payments, new mental-health benefits, a rise in severance and updated language around artificial intelligence, robotics and work-from-home policies. The agreement affects more than 2,100 DHL Express Canada employees who work as truck drivers, couriers and in warehouse and clerical roles. They were locked out after midnight on June 8 and went on strike hours later.
