The stock price of Constellation Energy (CEG) has experienced a significant drop of 3.22% on June 5, 20251. The drastic drop in CEG's stock price can be attributed to the following factors:
- Power Purchase Agreement with Meta: Constellation Energy has signed a 20-year power purchase agreement with Meta, which is a positive development for CEG. However, the terms of the agreement have raised concerns among analysts. Citi analyst Ryan Levine has downgraded CEG shares, citing that the estimated price per megawatt-hour of nuclear energy in the deal with Meta ranges from $75 to $90, which is not considered a high premium for low-carbon power and is comparable to prices offered by new natural gas plants2. This has led to uncertainty about the profitability of the deal and its impact on CEG's future earnings.
- Market Conditions and Analyst Sentiments: The broader market conditions and the sentiment among analysts have also contributed to the decline in CEG's stock price. While the deal with Meta is seen as a positive development by some analysts, others remain skeptical about the profitability of nuclear power deals and the long-term sustainability of nuclear energy in the face of increasing competition from renewable energy sources3. This has led to a mixed outlook for CEG's stock, with some analysts maintaining a positive stance while others have downgraded the stock.
In conclusion, the drastic drop in CEG's stock price is a result of a combination of factors including the terms of the power purchase agreement with Meta and the market conditions and analyst sentiments.
6/5/2025 10:44pm
