TLDR
- Constellation Energy received final DOJ approval for its $26.6 billion Calpine acquisition, set to close early 2026
- Shares gained 40% over the past year, crushing the S&P 500’s 13% return
- Q3 earnings hit $3.04 per share, up from $2.74 year-over-year
- Analysts forecast 20%+ earnings growth in 2026 driven by tech sector power demand
- Stock trades at double the utility sector’s average valuation despite strong fundamentals
Constellation Energy just cleared its final regulatory obstacle. The U.S. Department of Justice approved the company’s $26.6 billion purchase of Calpine, removing the last hurdle before deal completion.
The transaction should close in early 2026. When it does, Constellation will cement its position as America’s dominant clean energy powerhouse.
The stock pulled back slightly after the approval. Investors digested the concessions required to secure regulatory clearance. Some analysts recalibrated their synergy expectations following the announcement.
Constellation Energy Corporation, CEG
But the broader picture looks strong. Shares climbed over 40% in the past year while the S&P 500 gained just 13%.
Why This Deal Matters
Calpine brings something Constellation needs: natural gas and geothermal assets. As the nation’s largest producer in those categories, Calpine fills gaps in Constellation’s portfolio.
The combined entity will span coast to coast. It gains stronger footing in Texas, Virginia, and California—all high-growth power markets.
Tech companies are driving fresh demand for natural gas power. AI data centers need reliable electricity, and they need it now. Constellation’s expanded portfolio positions it to capture this wave.
The company already generates 90% of its power from carbon-free sources. Its nuclear, hydro, wind, and solar assets serve over 20 million homes and businesses.
Unlike traditional utilities, Constellation sells power competitively. It doesn’t operate regulated distribution networks. Instead, it signs long-term contracts with utilities, businesses, and industrial users. The company controls 21% of the commercial and industrial power market.
Financial Momentum Building
Third quarter results showed the growth trajectory. Adjusted earnings reached $3.04 per share, up from $2.74 a year earlier.
Wall Street expects acceleration ahead. Analysts project high single-digit growth this year and over 20% growth in 2026.
Capital spending plans total $3 billion in 2025 and $3.5 billion in 2026. Most funds target nuclear operations and clean energy expansion.
Major clients keep signing up. Microsoft and Meta Platforms both inked long-term power agreements. Federal agencies added clean energy contracts to the pipeline.
Constellation is restarting its Crane Clean Energy Center with help from a $1 billion Department of Energy loan. The 835-megawatt facility adds baseload capacity. Maryland projects could bring another 5,800 megawatts online.
The company launched emission-free energy certificates with Xpansiv. This creates a new revenue stream from its carbon-free output.
Valuation Questions Persist
Analyst sentiment leans positive overall. Nineteen analysts rate the stock “Moderate Buy” with price targets averaging $360. Some firms including Scotiabank and Jefferies see upside above $400.
The valuation debate centers on multiples. Constellation trades at roughly twice the utility sector’s average price-to-earnings ratio.
Bulls point to superior fundamentals. Debt-to-capital sits in the low 30% range. Return on equity exceeds 20%. Both metrics beat industry peers.
The stock closed at $359.82 on December 5, down 2.39% for the session.
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