Constellation Energy Set to Release Q3 2024 Earnings: What to Expect
Constellation Energy Corporation CEG will announce its third-quarter 2024 earnings on November 4.
Stay updated with all quarterly releases: Check out the Zacks Earnings Calendar.
Revenue and Earnings Projections for Q3
The Zacks Consensus Estimate for CEG’s third-quarter revenues stands at $6.21 billion, reflecting a year-over-year growth of 1.59%. Meanwhile, the consensus estimate for earnings is set at $2.72 per share, which represents a 20.35% decline compared to the previous year. However, in the past 60 days, this earnings estimate has risen by 7.5%.
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Earnings Surprise Track Record
Recently, Constellation Energy has exceeded the Zacks Consensus Estimate in two out of its last three quarters, with an average surprise of 10.86%.
Forecasting an Earnings Beat
Our model indicates a potential earnings beat for Constellation Energy this quarter. A combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) suggests favorable outcomes. Currently, Constellation Energy maintains a Zacks Rank of #3.
Constellation Energy Corporation Price and EPS Surprise
Constellation Energy Corporation price-eps-surprise | Constellation Energy Corporation Quote
Utilize our Earnings ESP Filter to identify the best stocks to consider ahead of earnings announcements.
Earnings ESP: CEG has an Earnings ESP of +3.92%.
Zacks Rank: Constellation Energy carries a Zacks Rank of #3. A full list of today’s Zacks #1 Rank stocks is available here.
Drivers of CEG’s Q3 Performance
The company’s earnings this quarter are likely bolstered by its efficiently operating nuclear fleet, which has maintained an annual nuclear capacity factor exceeding 94% over the last five years, compared to an average of nearly 91% nationwide. This capacity and availability should continue to provide ample clean electricity to Constellation’s customers.
Additionally, Constellation Energy aims to boost net income in 2024-2025 through organic initiatives such as wind repowering, nuclear uprates, renewals of nuclear licenses, and clean hydrogen production.
With a significant presence in providing clean electricity to almost 21% of the Competitive Commercial & Industrial (C&I) customers in the U.S., rising demand in this sector may further enhance the company’s results.
Significance of Nuclear Power in the U.S.
According to the U.S. Environmental Protection Agency, nuclear reactors account for nearly 20% of the country’s electricity usage. Despite the risks associated with nuclear power, new reactors are being developed, and dormant units are being revived to supply clean energy.
Recently, Constellation Energy decided to restart the Three Mile Island Unit 1, which had been offline for five years due to economic constraints, to fulfill Microsoft Corporation’s long-term power supply needs.
With increasing demand from AI-driven data centers, tech giants like Amazon are teaming up with Dominion Energy to explore small modular nuclear reactors to ensure a consistent supply of clean energy.
Stock Performance Overview
CEG shares have increased by 41.7% over the past six months, significantly outperforming the industry, which has risen by 22.4%.
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Current Valuation Insights
Currently, the company’s Price-to-Earnings (P/E) ratio stands at 29.93, which is above the industry average of 24.04.
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Investment Considerations
Constellation Energy is in a strong position to leverage the growing demand from major AI-driven centers, which will require reliable and clean energy for data operations. Many tech firms are seeking to establish their data centers near Constellation’s nuclear plants to ensure a steady clean power supply.
The company’s current ratio is 1.35, highlighting its capability to meet short-term financial obligations. Additionally, declining interest rates will aid this capital-intensive business in financing future projects.
However, Constellation Energy operates in a highly regulated space, which can lead to challenges from legislative and regulatory changes. Weather variability and seasonal factors may also impact its operations.
Conclusion
With investments aimed at enhancing clean energy production and expanding operations, Constellation Energy is well-positioned for future growth. The surging demand from data centers is expected to further boost its prospects.
Despite potential challenges, the company’s strong production assets make it a compelling addition to investment portfolios.
Expert Stock Picks
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
