Google and Amazon contracts support Constellation's nuclear fleet, but prices are undisclosed and earnings from them start after 2028. At $285 the stock costs about 24 times 2026 guidance. I expect $308 in a year, a Hold.
Key points
- 24 times 2026 adjusted earnings guidance midpoint ($12.00 a share) at $285.
- $308 target, 8% above the price, from $14 a share of 2027 adjusted earnings at 22 times.
- $24.7 billion of debt including short-term borrowings, after the Calpine deal.
The call
The price already requires the deals to work. At $285 the stock costs about 24 times this year's adjusted earnings guidance of $11.50 to $12.50, with earnings climbing about 17% next year.
I believe the deals are real but slow. Google and Amazon contracts run 20 years, yet prices are secret and the first uprate arrives in 2028. The stock gave back 5% after the October 6 jump of 12%.
Quarterly revenue and net income ($ billions)Source: SEC XBRL company facts, quarters to Jun 2026. Calpine consolidated from Jan 2026.
Valuation
| Item | Figure |
|---|
| 2026 adjusted EPS (guidance midpoint) | $12.00 a share |
| My 2027 adjusted EPS | $14.00 a share |
| Multiple on 2027 earnings | 22 times |
| Target in twelve months | $308 a share |
| Upside to price | 8% |
I use 22 times because a nuclear fleet with long contracts deserves a premium to ordinary generators, but Calpine adds gas exposure and debt. The stock today costs 20 times my 2027 figure, so the return roughly tracks earnings growth. Upside is under 12% and downside is limited by the capacity price floor, so Hold.
Risks
- Regulators cap prices or force new loads to bring their own supply; watch PJM and FERC (the federal power regulator) rulings.
- Debt and integration: $5.2 billion of short-term borrowings and pending asset sales; watch the third-quarter report and refinancing.
- Contract terms disappoint; watch whether pricing is disclosed and guidance is revised after summer.
What would change my mind
Disclosed contract prices well above $90 a megawatt-hour, or a guidance raise past $13, would make me a buyer; a guidance cut would make me a seller.