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Core Viewpoint - Constellation Energy Corporation (CEG) has experienced a significant decline of 26.9% in its stock price over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Stock Performance and Technical Indicators - CEG's Relative Strength Index (RSI) is currently at 23.74, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound [5]. - The RSI is a momentum oscillator that helps identify oversold conditions, typically when the reading falls below 30, signaling potential entry opportunities for investors [2][3]. Group 2: Earnings Estimates and Analyst Consensus - There is a strong consensus among sell-side analysts regarding an increase in CEG's earnings estimates, with a 0.8% rise in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [6]. - CEG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [7].

Core Viewpoint - The emergence of DeepSeek in January 2025 has significantly impacted the AI and nuclear energy sectors, leading to substantial market capitalization losses for companies like Nvidia and Constellation Energy [1][2]. Company Analysis: Constellation Energy - Constellation Energy's stock experienced a 21% decline in market capitalization following the introduction of DeepSeek, and it is currently trading 29% below its previous share price [2]. - The company remains committed to nuclear energy, announcing a $100 million investment to upgrade its Calvert Cliffs nuclear power plant in Maryland, aiming to renew operating licenses and increase future power output [4][5]. - The planned upgrades include replacing critical components and installing $68 million worth of new electrical breakers to enhance power output by 10%, with each unit expected to produce approximately 950 megawatts of continuous nuclear power [5]. Market Position and Growth Potential - Constellation's existing licenses allow operation into the 2030s, with potential extensions enabling operation into the 2050s [6]. - Despite a trailing price-to-earnings ratio of 20.7, which appears attractive compared to the S&P 500 average of 29.8, analysts project a long-term annual growth rate of only 7.4% for Constellation, which is below the average expected growth of 9.5% for S&P stocks [7]. - The company is viewed as a bellwether for the AI-nuclear energy trend, but it faces competition from other utilities that may also benefit from this trend [8]. Competitive Landscape - Other nuclear operators such as Duke Energy, Dominion Energy, and Southern Co. have lower P/E ratios (20.4, 20.8, and 22.3 respectively) and offer better dividend yields compared to Constellation's 0.6% [9]. - Dominion Energy is highlighted as a preferable investment option, with a P/E ratio of about 21, a projected long-term earnings growth rate of 17.5%, and a superior dividend yield of 4.7% [10][11].

Core Viewpoint - Constellation Energy Corporation (CEG) shares are experiencing a downward trend, with a significant sell-off of over 8% on Friday, indicating a potential continuation of this decline [1]. Price Support and Market Dynamics - Support is defined as a price level where there is substantial buying interest, which can halt or reverse a downward trend when reached [2]. - When a stock is in a downtrend, it indicates that there are more shares available for sale than there are buyers, leading to price reductions [2]. - A stock may rally after reaching a support level due to increased buying interest from anxious buyers who fear missing out on potential price increases [3][4]. Break of Support - The support level at $280 for Constellation Energy has been breached, suggesting that the buyers who previously established this support have exited the market [5][9]. - If the support is broken, sellers may need to lower prices further to execute their orders, which could lead to a continued downward trend for Constellation Energy [6]. Historical Context of Support and Resistance - The $280 support level was previously a resistance level, illustrating the market behavior where former resistance can become support as remorseful sellers attempt to buy back shares at the price they sold [7][8].

Core Viewpoint - Constellation Energy Corporation (CEG) reported strong fourth-quarter earnings, driven by favorable nuclear portfolio results and strategic investments in renewable energy, surpassing market expectations consistently over the past year [1][2][20]. Financial Performance - CEG reported fourth-quarter 2024 earnings of $2.44 per share, exceeding the Zacks Consensus Estimate of $2.19 by 11.4% [1] - The company achieved a nuclear operating capacity factor of 94.8% in Q4 2024, ensuring a consistent supply of clean energy [9] - Total operating expenses decreased to $4.48 billion, down 23.6% from $5.86 billion in the previous year, with operating income at $972 million compared to an operating loss of $67 million in the year-ago quarter [10] Stock Performance - CEG stock closed at $284.44 on February 21, with a 113.5% increase over the past year, outperforming the industry average of 65.9% and the S&P 500's growth of 19.7% [4] - The company has consistently surpassed earnings expectations, with an average earnings surprise of 10.16% over the last four quarters [2][3] Strategic Investments - CEG plans to invest nearly $3 billion and $3.5 billion in capital expenditures for 2025 and 2026, respectively, with 35% allocated for nuclear fuel acquisition [13] - The company entered into a definitive agreement to acquire Calpine Corporation, enhancing its position as a leading competitive retail supplier of clean energy [11] Market Position - CEG's trailing 12-month return on equity stands at 21.96%, significantly higher than the industry average of 8.44%, indicating effective utilization of shareholders' funds [16] - The stock is currently trading at a premium compared to its industry on a forward 12-month P/E basis [18][22] Future Outlook - The company is poised to benefit from the growing demand for clean energy, particularly from AI-driven data centers, with a significant investment from major tech companies expected in the sector [15][20] - CEG has executed a 20-year Power Purchase Agreement (PPA) with Microsoft to support the restart of the Three Mile Island Unit 1, further solidifying its market position [15]

Market Overview - In 2023 and 2024, a small group of seven stocks, referred to as the Magnificent Seven, delivered gains of over 160% [1] - As of February 20, 2025, the NASDAQ index is up about 8%, while the Magnificent Seven stocks are only up 1%, indicating a potential shift in market dynamics [2] Factors Affecting Performance - Investors are concerned about stretched valuations, the impact of capital expenditures on AI on earnings, and the effects of higher interest rates on borrowing [3] Investment Opportunities - There is a potential rotation trade emerging, suggesting that investors may consider moving funds out of the Magnificent Seven into other growth stocks [4] F5 Inc. (FFIV) - F5 Inc. provides distributed cloud services and reported first-quarter 2025 revenue of $747 million, a 7% increase year-over-year [6] - The company raised its guidance for revenue growth to 5% for the second quarter and between 6% and 7% for the full year [6] - FFIV stock is up 20.2% in 2025 and 65.1% over the last 12 months, with analysts raising price targets significantly post-earnings [8] Tapestry Inc. (TPR) - Tapestry, known for brands like Coach and Kate Spade, reported a 5% year-over-year revenue increase and a record $2.00 earnings per share, a 23% increase [9] - The stock is up 32% in 2025 and 84% for the year, with analysts raising price targets above $100 [10] - The potential acquisition of Capri Holdings for $8.5 billion was blocked by the FTC, but this may benefit Tapestry's shareholders in the long run [11] Constellation Energy Corp. (CEG) - Constellation Energy has seen a 144% increase in stock price over the last 12 months, driven by a partnership with Microsoft to reopen the Three Mile Island nuclear plant [13] - The stock is currently trading above $300, which may indicate overextension, but there is underlying conviction as dips in stock price are being bought up [14][15] - Analysts are raising price targets for CEG, although it is not currently among the top recommendations from leading analysts [16]

Core Insights - The S&P 500 index experienced a strong start to 2025, rising 2.7% in January, continuing its upward trend from 2024 [1] - Five top-performing S&P 500 stocks rose over 20% in January, with Robinhood Markets leading the gains [1] Company Summaries - **Robinhood Markets**: Stock surged by 39.4% after clarity emerged regarding the SEC investigation, resulting in a $45 million penalty [2] - **Twilio**: Increased by 35.6% following a positive Investor Day on January 23, with expectations of positive operating income in 2025 and over $3 billion in free cash flow from 2025 to 2027 [3] - **Constellation Energy**: Stock rose 34.1% after announcing plans to acquire Calpine, leading to a 25% increase on the day of the news [4] - **CVS Health**: Gained 25.8% due to a proposed 4.3% average increase in Medicare Advantage payments and a price target increase from Evercore ISI [5] - **GE Aerospace**: Stock increased by 22% after reporting a 14% rise in revenue and a 21% increase in free cash flow compared to Q4 2023, along with a positive forecast for 2025 [6]

Core Viewpoint - Constellation Energy Corporation (CEG) reported strong fourth-quarter earnings, exceeding estimates, but faced revenue declines compared to the previous year [1][2]. Financial Performance - CEG's fourth-quarter 2024 earnings per share (EPS) were $2.44, surpassing the Zacks Consensus Estimate of $2.19 by 11.4% [1]. - Total revenues for the quarter were $5.38 billion, missing the Zacks Consensus Estimate of $5.51 billion by 2.4%, and decreased 7.1% from $5.8 billion in the same quarter last year [2]. - Full-year 2024 revenues totaled $23.6 billion, down from $24.9 billion in the previous year [2]. - Total operating expenses were $4.48 billion, down 23.6% from $5.86 billion in the year-ago period, leading to an operating income of $972 million compared to an operating loss of $67 million in the prior year [3]. Financial Position - As of December 31, 2024, CEG had cash and cash equivalents of $3.02 billion, a significant increase from $0.368 billion a year earlier [5]. - Long-term debt decreased to $7.384 billion from $7.496 billion as of December 31, 2023 [5]. - Cash used in operating activities in 2024 was $2.46 billion, down from $5.30 billion the previous year [5]. - Total capital expenditures for 2024 were $2.57 billion, slightly up from $2.42 billion a year ago [5]. Strategic Developments - CEG entered into a definitive agreement to acquire Calpine Corporation, which will enhance its position as a leading producer of clean energy and reliable natural gas assets [4]. - The acquisition deal includes 50 million shares of CEG's common stock and $4.5 billion in cash [4]. Guidance - CEG provided full-year 2025 adjusted operating earnings guidance of $8.90-$9.60 per share, with the Zacks Consensus Estimate at $9.30 per share, indicating a positive outlook [6]. Market Position - CEG currently holds a Zacks Rank 2 (Buy), reflecting a favorable market position [7].

Acquisition and Growth Strategy - The company announced an agreement to acquire Calpine Corporation, which would create the nation's leading competitive retail electric supplier and enhance its scale and diversification[95]. - The company aims to maintain investment grade credit ratings and optimize cash returns through disciplined operations and cost management[90]. - The company is focused on growth opportunities in clean energy, efficiency, storage, and electrification to meet customer sustainability targets[98]. - Significant investments from hyperscalers in AI technology are driving unprecedented demand for reliable energy, presenting growth opportunities for the company[102]. Clean Energy Commitment - The company is committed to a clean energy future and aims to support businesses and public entities in achieving sustainability goals[91]. - The company supports public policy for vehicle electrification and invests in enabling infrastructure and technology to facilitate decarbonization[111]. - Emerging technologies such as advanced nuclear power, carbon capture, and energy storage are expected to significantly contribute to decarbonization efforts[123]. - The company has made investments in developing carbon capture technologies to reduce GHG emissions from carbon-emitting generating plants[110]. - The company is actively involved in corporate clean energy targets, supporting commitments to reduce GHG emissions through clean energy procurement[122]. Nuclear Energy and Emissions - Nuclear energy accounts for over 50% of the nation's carbon-free power, and the company plans to extend the licenses of its nuclear fleet to 80 years with continued policy support[101]. - The company achieved a 94.6% capacity factor across its nuclear fleet in 2024, producing 182 TWh of electricity from 22 GWs of carbon-free generation capacity[110]. - The company is positioned as a low-carbon generation company, minimizing GHG emitting assets and maximizing carbon-free electric production[109]. - In 2023, the company's Scope 1 and 2 market-based GHG emissions were 10 million metric tons CO2 equivalent, with 9.3 million metric tons from natural gas and oil-fueled generation, significantly lower than peers[109]. - The company emphasizes the importance of regulatory support for nuclear energy to ensure reliability and security of the electrical grid[101]. Regulatory and Environmental Compliance - The company operates under comprehensive environmental legislation and regulations at federal, state, and local levels, addressing climate change and GHG emissions[104]. - The company is evaluating market impacts of new EPA regulations on GHG emissions from power plants, which are currently under litigation[114]. - Six out of twelve nuclear stations operated by the company have been deemed compliant with the EPA's Section 316(b) rule using existing technology[127]. - The company has completed all required studies and submitted recommendations for compliance as part of the NPDES/SPDES renewal process for its nuclear stations[127]. - The company has established appropriate contingent liabilities for environmental remediation requirements, with potential significant additional expenditures not presently determinable[135]. Workforce and Community Engagement - In 2024, the company hired over 1,400 employees, aiming to attract and retain a world-class workforce[147]. - The total number of employees as of December 31, 2024, was 14,264, including 14,215 full-time employees[150]. - The turnover rate for regular employees for the year ended December 31, 2024, was 1.50% for involuntary terminations, 2.40% for retirements, and 3.50% for voluntary resignations[151]. - Approximately 25% of all employees participate in collective bargaining agreements (CBAs), with 3,333 employees covered by 21 CBAs as of December 31, 2024[152]. - The company actively invests in community development, with employees donating over $5.3 million to non-profit organizations and providing more than 116,500 volunteer service hours in 2024[146]. Energy Demand and Market Position - The U.S. energy sector is experiencing unprecedented changes, increasing demand for reliable, clean power generation, which positions the company's generation fleet favorably[97]. - 25 states and the District of Columbia have set 100% clean energy targets, impacting 55% of U.S. residential electricity customers, with the company being the largest generator of carbon-free electricity[115]. - The company will continue to manage cash flow volatility through prudent risk management strategies across its business[94]. - The company is engaged in partnerships with national labs, universities, and startups to foster innovation in energy solutions[98].

分组1 - Constellation Energy Corporation (CEG) reported quarterly earnings of $2.44 per share, exceeding the Zacks Consensus Estimate of $2.19 per share, compared to a loss of $0.11 per share a year ago, representing an earnings surprise of 11.42% [1][2] - The company posted revenues of $5.38 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.39%, and down from $5.8 billion year-over-year [2] - Constellation Energy shares have increased approximately 41.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 4% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $2.02 on revenues of $4.46 billion, and for the current fiscal year, it is $9.30 on revenues of $21.49 billion [7] - The Zacks Industry Rank for Alternative Energy - Other is in the top 32% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]