Nuclear deals with Google and Amazon extend growth, but at 24 times 2026 earnings the stock already reflects it. I see 6.6% upside to $303.75.
Key points
- $2.24 billion of annual PJM capacity revenue is locked for 2028 to 2029 at $325 per MW-day.
- $12.00 a share is the 2026 adjusted guidance midpoint after a $0.50 raise in August 2026.
- 1,580 MW of hyperscaler nuclear deals with Google and Amazon stretch contracts into the 2040s.
The call
The market is about right on nuclear growth. At $285.01 a share the stock trades near 24 times 2026 adjusted earnings. That price needs steady growth in capacity revenue plus new hyperscaler contracts starting late this decade.
Quarterly revenue jumps with Calpine ($ billions)SEC XBRL revenue to Q2 FY26; Q3-Q4 FY26E are my forecasts. Retrieved Oct 8 2026.
I see durable growth but little mispricing. I forecast $13.50 a share in 2027 adjusted earnings from Calpine, PJM capacity and customer margins. That supports a $303.75 target and only single digit upside from here.
Valuation
| Driver | Figure |
|---|
| 2026 adjusted EPS guidance midpoint | $12.00 a share |
| 2027E adjusted EPS | $13.50 a share |
| Target multiple | 22.5 times |
| Annualized dividend | $1.71 a share |
| 12-month target | $303.75 a share |
A 22.5 multiple pays for scarce nuclear output and long contracts. It sits above regulated utilities near 18 times and below peak merchant multiples. With 6.6% price upside plus a 0.6% yield, a hold fits the asymmetry.
Target rises with 2027 earnings at 22.5 timesMy arithmetic at 22.5 times earnings. As of Oct 8 2026.
Risks
- PJM capacity prices fall in the next auction, which you would see in lower cleared prices and softer commercial margins.
- Crane restart or uprate spending overruns, which you would see in rising capital spending without new revenue.
- High debt costs linger with $24.70 billion of debt, which you would see in higher interest expense and slower buybacks.
What would change my mind
Premium pricing on the Google and Amazon contracts that lifts 2027 earnings above $14.00 a share would make me more positive.