Constellation Energy's Valuation Raises Questions Amid Data Center Surge

Constellation Energy (CEG) stock is considered pricey after its data center surge, with Jefferies analyst Paul Zimbardo raising the price target to $347.00 while maintaining a Hold rating. CEG prices in future data center awards, and the firm stays cautious with a Hold rating due to the stock's relatively high price compared to peers.

Jefferies analyst Paul Zimbardo has raised the price target for Constellation Energy (CEG) to $347.00, up from $293.00, while maintaining a Hold rating on the stock [1]. This new target represents a 15% upside from the current price of $301.58.

The research firm noted that CEG's stock is currently pricing in approximately $142 per share in data center value, which accounts for about 47% of its current price. The stock has shown strong momentum, delivering a 75% return over the past year and trading near its 52-week high of $357.

Jefferies has adjusted its assumptions for Constellation’s nuclear portfolio, now assuming 75% for the "eligible" nuclear portfolio (excluding New York) or 13GW at $88/MWh and the remaining 5GWs at $80/MWh, plus Clinton/Crane PPAs. Despite the significant increase in the price target, Jefferies considers Constellation Energy relatively expensive compared to its peers.

The firm indicated that the current valuation embeds "a very significant ’market share’ of future data center awards," though Constellation has a better profile following relative weakness. With a market capitalization of $94.2 billion, Constellation represents a significant player in the energy sector.

This adjustment follows recent earnings reports. Constellation Energy reported second-quarter 2025 adjusted earnings per share of $1.91, surpassing the consensus estimate of $1.85. The company also reaffirmed its full-year guidance range of $8.90 to $9.60. Following these results, several firms adjusted their price targets for Constellation Energy. BofA Securities raised its target to $374, while BMO Capital increased theirs to $375, both maintaining a Buy and Outperform rating, respectively. Mizuho also adjusted its price target to $335, keeping a Neutral rating. Raymond James set their price target at $393, highlighting the company’s position as the largest independent power producer in the U.S. Additionally, Melius Research initiated coverage with a Buy rating, citing Constellation’s leadership in nuclear power production.

These developments reflect the company’s strong performance and its significant role in carbon-free power generation. Despite the positive outlook, Jefferies' Hold rating suggests caution due to the stock's relatively high price compared to peers. Investors should consider these factors when evaluating Constellation Energy's prospects.

[1] Investing.com - Jefferies raises its price target on Constellation Energy (NASDAQ:CEG) to $347.00 from $293.00 on Monday, while maintaining a Hold rating on the stock.