TLDR
- Morgan Stanley resumed coverage of Constellation Energy (CEG) with an Overweight rating and a $385 price target, implying ~30.6% upside from Tuesday’s close of $294.85.
- CEG stock rose 4.2% to $307.04 on Wednesday, though it remains down 16.5% year-to-date, including a 10.6% drop since the Iran war began.
- Morgan Stanley called the current price an “attractive entry point,” valuing data center contracting opportunities alone at $70 per share.
- Constellation holds the largest nuclear fleet in the U.S. at ~22 gigawatts and has existing long-term power deals with Meta and Microsoft.
- Wall Street expects CEG’s Q1 earnings to rise 17% to $2.51 per share, with full-year revenue forecast up 17% to $29.88 billion.
Constellation Energy (CEG) stock closed Tuesday at $294.85 before rising 4.2% to $307.04 on Wednesday.
Constellation Energy Corporation, CEG
Morgan Stanley resumed coverage of Constellation Energy (CEG) with an Overweight rating and a $385 price target on Wednesday. That target represents around 30.6% upside from Tuesday’s closing price.
The call comes at a tough moment for the stock. CEG is down 16.5% year-to-date, including a 10.6% drop since the Iran war began. The analyst team, led by David Arcaro, sees that pullback as an opening.
“We estimate CEG is priced at a level that values the existing assets ($255/share on our math) with modest value for incremental growth and value upside opportunities,” the note said.
Morgan Stanley’s $385 target breaks down the value across several drivers: $70 per share from data center contracting, $40 from higher power prices, and $22 from its clean energy credits. That adds up fast for a stock sitting in the $290s.
The Nuclear Case
Constellation operates the largest nuclear fleet in the U.S., with roughly 22 gigawatts of capacity. Morgan Stanley highlighted the fleet’s 24/7 clean baseload output, long asset lives, land and interconnection ready for data centers, and potential for small modular reactors on-site as key upside factors.
The AI-driven nuclear narrative isn’t new for CEG. The stock gained 91% in 2024 and 58% in 2025 before cooling off this year.
Constellation already has two major long-term power deals in place. In 2024, it signed a 20-year contract with Microsoft to supply nuclear power to its data centers. Nine months later, in June 2025, it signed another 20-year deal with Meta — supplying over 1,100 megawatts from its Clinton Clean Energy Center in Illinois.
Morgan Stanley said it expects “further data center contracting opportunities this year.”
What’s Coming Up
Constellation is set to release its 2026 financial outlook and strategy on March 31. The company held back on providing guidance when it reported Q4 earnings in February, so the upcoming update is being watched closely.
Morgan Stanley flagged the March 31 event as the “next catalyst for a potential contract announcement.”
On the earnings front, Wall Street expects Q1 earnings per share to rise 17% to $2.51, with revenue up 30% to $8.84 billion. For the full year, analysts forecast profit of $11.69 per share and revenue of $29.88 billion — representing growth of 24.5% and 17%, respectively, versus 2025.
The broader analyst consensus, per InvestingPro, sees 38% potential upside, slightly above Morgan Stanley’s 30.6% target.
In Q4, Constellation posted adjusted earnings of $2.30 per share, just below the $2.31 consensus, while revenue of $6.07 billion beat estimates of $4.95 billion by a wide margin.
The company also recently agreed to sell roughly 4.4 gigawatts of natural gas assets in the PJM market to LS Power Equity Advisors for $5 billion — a divestiture required following its acquisition of Calpine.
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