CEG Stock Underperforms Industry in a Month: What Should You Do Now?

Core Viewpoint - Constellation Energy Corporation (CEG) has experienced a 2% share price increase over the past month, underperforming compared to the Zacks Alternate Energy – Other industry's growth of 13% [1] Group 1: Company Performance and Strategy - CEG is positioned to benefit from the increasing demand for data centers, leveraging its nuclear fleet to provide reliable and clean power [1][4] - The company generates nearly 90% of its annual energy output from carbon-free sources, with a goal to achieve 95% carbon-free electricity by 2030 and 100% by 2040 [5] - The recent acquisition of Calpine enhances CEG's growth prospects by expanding its presence in competitive power markets and adding efficient gas-fired assets, which improves earnings diversification and cash flow stability [6][20] Group 2: Financial Metrics and Estimates - The Zacks Consensus Estimate for CEG's 2026 earnings per share (EPS) has improved by 0.62% over the past 60 days, with a long-term earnings growth rate projected at 15.42% [10] - CEG has a trailing 12-month return on equity of 21.59%, significantly higher than the industry average of 6.39%, indicating effective utilization of shareholder funds [12][14] - The company has an ongoing capital return program, with a board authorization for up to $3 billion in share repurchases, of which approximately $593 million remains as of September 30, 2025 [16] Group 3: Market Position and Valuation - CEG trades at a premium price-to-earnings (P/E) ratio compared to its industry, reflecting its strong market position and growth potential [18] - The company aims to increase its annual dividend by 10%, subject to board approval, further enhancing shareholder value [17]