The market is too pessimistic about earnings growth from existing plants and contracts. My twelve-month target is $336.26, without assuming that the newly announced nuclear expansions produce near-term profits.
Key points
- $336.26 a share is my twelve-month target, supported by existing operations.
- $14.62 a share is my forecast for 2028 adjusted operating earnings.
- $0 of 2027 earnings in my forecast comes from the newly announced Google uprates.
The call
The price requires surprisingly little earnings growth if the premium survives. At my valuation of 23 times earnings, today's price requires 2028 adjusted earnings of $12.39 a share. That is only 3% above the midpoint of management's 2026 guidance. Adjusted earnings remove accounting swings and selected expenses.
Second-quarter profit adjustments ($ millions)Source: August 6, 2026 10-Q; Q2 2026. Total is adjusted operating earnings.
I expect existing assets to deliver more. My forecast grows earnings backed by contracts and federal nuclear support by 19% annually through 2028, then adds completed repurchases. Earnings above that foundation decline modestly. Google's expansion starts later; its existing-power agreement strengthens durability, but undisclosed pricing prevents me from assigning incremental profits.
Valuation
| Driver | My estimate |
|---|
| 2026 foundational earnings | $6.65 a share |
| 2028 foundational earnings, including repurchases | $9.62 a share |
| 2028 earnings above that foundation | $5.00 a share |
| 2028 adjusted operating earnings | $14.62 a share |
| October 2027 forward earnings multiple | 23 times |
| Twelve-month target | $336.26 a share |
How much the earnings multiple changes the outcomeOur October 8, 2026 scenarios; each uses our 2028 adjusted EPS estimate of $14.62.
I allow a three-times scarcity premium above a 20-times starting multiple, worth $43.86 a share, for reliable nuclear supply and long contracts. High interest rates and debt limit that premium. My sell-heavy record is too young to establish that cutting premiums works; improving contracts and recent relative strength argue against doing so reflexively.
Risks
- Cash trails earnings: first-half 2026 cash after capital spending was roughly negative $1 billion; watch collateral requirements and refinancing.
- Policy can reduce plant economics: watch restrictions on existing-power contracts and changes to capacity payments, which reward availability.
- Execution can interrupt growth: watch forced outages, expansion budgets and whether Crane restarts during 2027.
What would change my mind
A 2027 adjusted earnings outlook below $13 a share, or a Crane restart delayed beyond 2027, would overturn my earnings-growth case.