Constellation Energy cut at KeyBanc as positive catalysts have played out
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Constellation Energy (NASDAQ:CEG) -2% in Wednesday's trading as KeyBanc downgraded the stock to Sector Weight from Overweight, saying it now trades ahead of other clean energy developers, indicating further multiple expansion may be limited for now.
KeyBanc's Sangita Jain sees Constellation (CEG) as a quality company with long-term contracted-type asset characteristics and adequate downside support from the nuclear PTC provisions in the Inflation Reduction Act, but with valuation at current levels and the near-term free cash flow mostly spoken for via the recent nuclear acquisition and stock buybacks, the short-term catalysts have played out, likely meaning the stock will remain mostly range-bound, at least in the near term.
Jain said he expects Constellation's (CEG) attainment of H2 hub funding later this fall to determine the fate of the temporarily on-hold $900M H2 investment.
Separately, Constellation (CEG) disclosed it has acquired a 35.3% stake in NET Power (NPWR).
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Stock price return: Up 13.5% YTD, up 50.5% in the past 12 months