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Investing.com - Mizuho (NYSE:MFG) raised its price target on Constellation Energy (NASDAQ:CEG) to $325.00 from $290.00 on Monday, while maintaining a Neutral rating on the stock. The $100.7 billion market cap company has seen its shares surge 71% over the past year, with a notable 44% gain year-to-date. According to InvestingPro data, the stock appears overvalued at current levels, trading near its 52-week high of $352.
The price target adjustment comes one day before PJM is scheduled to publish results for its 2026/2027 Base Residual Auction on July 22 at 4 pm EDT. With a beta of 1.14 and an overall Financial Health score rated as "GOOD" by InvestingPro, Constellation Energy shows strong market positioning ahead of this crucial auction. Get access to detailed valuation models and 12 additional ProTips with an InvestingPro subscription.
Mizuho noted that the upcoming auction includes several key rule changes from the prior auction held in June 2024, including a capacity price collar set between $175/MW-day and $325/MW-day, inclusion of Reliability Must Run units in the capacity stack, and expansion of the Must Offer rule to include intermittent resources.
The firm initially expected prices to hit the $325/MW-day cap due to tight supply and limited new build response, but now suggests prices could land anywhere within the collar, potentially at the floor.
The previous 2025/2026 auction saw capacity prices in much of PJM clear over nine times higher than the prior year, which may lead to Demand Response playing a larger role in the upcoming auction.
In other recent news, Constellation Energy Corporation has received regulatory approval from the New York State Public Service Commission for its acquisition of Calpine Corporation. This approval is a critical step in the transaction, which aims to merge Constellation’s nuclear assets with Calpine’s natural gas and geothermal operations. The merger still requires clearances from the Federal Energy Regulatory Commission and the Department of Justice, with an expected closure in the fourth quarter of 2025. In analyst updates, BMO Capital raised Constellation Energy’s stock price target to $350, maintaining an Outperform rating, following a significant virtual power purchase agreement with Meta Platforms (NASDAQ:META). Wolfe Research also increased its price target for Constellation Energy to $350, highlighting the company’s growth potential and recent strategic agreements. Conversely, Citi downgraded Constellation Energy’s stock rating from Buy to Neutral, despite raising the price target to $318, due to a recent rally in the stock price and the Meta deal. These analyst updates reflect varying perspectives on Constellation’s financial prospects amid its ongoing business developments.
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