Constellation Energy (CEG) is a Zack Rank #1 (Strong Buy) that is a leading energy provider in the United States, specializing in electricity generation. The company delivers electric power, natural gas, and energy management services to over 2 million customers nationwide.With the stock up over 41% already this year, CEG is looking to be a big winner in 2025. It is the largest gainer in the S&P 500 so far in January, but investors are looking for more as nuclear energy becomes a focus to fuel artificial intelligence demand. About the CompanyHeadquartered in Baltimore, Maryland, Constellation operates through five segments—Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions. Constellation boasts approximately 33,094 megawatts (MW) of generating capacity. This capacity spans a mix of nuclear, wind, solar, natural gas, and hydroelectric assets. Its customer base includes distribution utilities, municipalities, cooperatives, and residential, commercial, industrial, and governmental entities.As the lowest carbon emitter among major U.S. investor-owned generators, Constellation Energy is committed to eliminating 100% of its greenhouse gas emissions. It leverages cutting-edge technology and a diverse energy portfolio, including the nation’s largest carbon-free nuclear fleet, to generate 60% of America’s clean, zero-carbon energy.The stock has a Zacks Style Score of “A” in Momentum, but “D” in Growth and “F” in Value. Nuclear Gains SteamConstellation Energy operates the largest fleet of nuclear plants in the United States, consisting of 21 reactors across 12 sites in the Midwest, Mid-Atlantic, and Northeast regions. These reactors collectively produce clean, zero-carbon, and reliable energy, significantly contributing to the nation’s electricity supply.In 2021, Constellation achieved a nuclear capacity factor of 94.5%, the highest in the industry. During the summer months of 2024, the reactors operated at a 98.1% capacity factor, showcasing exceptional reliability during periods of high electricity demand. In early January Constellation secured contracts worth $1 billion to supply nuclear power to the U.S. government over the next decade. This agreement represents a significant milestone for the company and nuclear energy as it marked the largest federal procurement of nuclear energy to date.With the rise of energy demands driven by advancements in Artificial Intelligence, nuclear energy stands out as a key solution to meet the nation’s needs. Technologies like Small Modular Reactors (SMRs) and advanced reactors such as Pressurized Water Reactors (PWRs) and Fast Breeder Reactors (FBRs) offer scalable, reliable, and carbon-free power, making nuclear an essential component in supporting the growing energy landscape. Calpine DealOn January 10^th, Constellation Energy announced the acquisition of Calpine Corporation in a deal valued at approximately $26.6 billion, including $4.5 billion in cash, 50 million shares of Constellation stock, and the assumption of $12.7 billion in Calpine’s debt.The acquisition will combine Constellation’s nuclear expertise with Calpine’s low-emission natural gas and geothermal plants, creating the nation’s largest clean energy provider with over 27,000 megawatts of generation capacity.Constellation anticipates generating over $2 billion in annual free cash flow from the deal. Following the announcement, Constellation’s shares rose by 15%, with analysts raising price targets, citing strong growth prospects from the acquisition. Q3 Earnings BeatConstellation delivered strong Q3 earnings, reporting an EPS of $2.74, which surpassed analyst estimates of $2.64 and represented a 28.64% increase from the previous year’s $2.13 EPS. Quarterly sales reached $6.550 billion, exceeding the consensus estimate of $5.714 billion, marking a 7.18% year-over-year increase. The company’s generation fleet performed notably well, and Constellation raised its FY24 adjusted operating EPS guidance to $8.00 – $8.40, although slightly below the analyst estimate of $8.43. Constellation Energy Corporation Price and EPS Surprise Constellation’s shares traded lower due to a combination of the market wanting more and concerns over regulatory challenges. However, the stock did rally before the Calpine deal, which eventually took shares to new heights. Estimates Headed HigherDuring the Q3 earnings call, Constellation highlighted significant milestones, including a 20-year power purchase agreement with Microsoft to restart the Crane Clean Energy Center and Three Mile Island Unit 1, emphasizing its commitment to clean, reliable energy.Analysts see a bright future ahead, with many taking their earnings estimates significantly above the pre-earnings levels.For the current quarter, estimates have gone from $1.31 to $2.20 over the last 90 days. This is a jump of 67%.For the current year, estimates have gone from $8.01 to $8.43, or 5.2% over the same time frame.And for next year, the trend continues. Over the last 90 days, estimates have gone from $8.99 to $9.37 or 4.2%. The Technical TakeThe stock is trading at all-time highs after the Calpine deal. With earnings in late February, investors likely continue the momentum higher. There are Fibonacci extension targets at $330 and $395, but let us look at some levels to buy on any pullback.

While most investors do not want to chase, this stock might not give an opportunity to buy. This stock has tremendous momentum and could continue higher into EPS. In SummaryConstellation Energy stands poised for a remarkable 2025, buoyed by its stellar Q3 performance and strategic initiatives.The acquisition of Calpine Corporation further solidifies Constellation’s position as a clean energy powerhouse, combining nuclear expertise with low-emission natural gas and geothermal assets. This strategic move is expected to generate significant free cash flow, enhancing shareholder value, and driving the company’s growth trajectory.Investors looking for a strong, sustainable growth story should find Constellation Energy an attractive proposition. Its blend of operational excellence, strategic acquisitions, and a clear commitment to environmental stewardship sets the stage for continued success.More By This Author:Bear Of The Day: Caesars Entertainment Bear of the Day: Thor IndustriesBull Of The Day: Park Hotels & Resorts