BALTIMORE - Constellation Energy Corporation (NASDAQ:CEG), a leading producer of carbon-free energy in the United States with a market capitalization of $75.88 billion and impressive 110% stock return over the past year, announced its eligibility for federal tax credits for clean hydrogen production. InvestingPro analysis shows strong momentum in the company’s performance, with multiple ProTips available for subscribers seeking deeper insights. This follows the U.S. Treasury Department’s updated ruling, which now allows existing nuclear plants to qualify for tax incentives under Section 45V of the Inflation Reduction Act.
The company’s CEO, Joe Dominguez, expressed satisfaction with the Treasury’s decision, stating that it enables a considerable segment of the current merchant nuclear fleet to obtain credits for hydrogen production. With annual revenue of $23.98 billion and EBITDA of nearly $6 billion, Constellation demonstrates substantial operational scale. For comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro. Dominguez highlighted the importance of nuclear energy in supporting customers’ transition to clean hydrogen and sustainable technologies.
The announcement comes on the heels of a recent 10-year agreement between the U.S. General Services Administration and Constellation for nuclear power supply. This deal underscores the growing reliance on nuclear energy by the government, utilities, and businesses for meeting power and sustainability objectives.
While Constellation is in favor of the new rule, the company maintains that any limit on incrementality is not aligned with the notion that clean hydrogen consumers should be able to utilize dependable nuclear energy from America’s plant fleet. Nonetheless, the rule change is seen as a positive development.
Constellation is currently assessing the implications of the final rules and the proposed new electric transmission charges on the feasibility of its planned clean hydrogen project at the LaSalle Clean Energy Center and the company’s involvement in the MachH2 Hub.
Headquartered in Baltimore, Constellation is a Fortune 200 company and the nation’s largest clean energy producer, with a portfolio that includes hydro, wind, solar, and the largest nuclear fleet. The company’s power generation is nearly 90% carbon-free and has the capacity to supply the equivalent of 16 million homes, contributing to about 10% of the nation’s clean energy. According to InvestingPro metrics, the company maintains a FAIR financial health score, while analysts have set a consensus price target suggesting potential upside, though current valuations indicate the stock may be slightly overvalued.
With a commitment to achieving 100% carbon-free generation by 2040, Constellation is investing in emerging technologies to reduce carbon emissions across the economy. The information in this article is based on a press release statement from Constellation.
In other recent news, Constellation Energy has secured a substantial agreement with the U.S. Government to supply approximately 1 million megawatt-hours of power annually. The deal, valued around $1 billion, includes energy savings and conservation measures at various government facilities. Analysts at KeyBanc have maintained their Overweight rating on Constellation Energy stock, supporting a price target of $298.00. In addition, Jefferies has reaffirmed its Hold rating on the company’s stock, analyzing the potential impact of the power agreements.
The company has also announced the appointment of two new members to its board of directors, Peter Oppenheimer and Eileen Paterson. Furthermore, BofA Securities has upgraded Constellation Energy’s stock from Neutral to Buy, citing the company’s potential for sustained double-digit growth. However, BMO Capital Markets, Jefferies, and Mizuho (NYSE:MFG) Securities have adjusted their price targets for Constellation Energy following a recent decision by the Federal Energy Regulatory Commission.
Constellation Energy reported robust third-quarter earnings, surpassing expectations with GAAP earnings of $3.82 per share and adjusted operating earnings of $2.74 per share. The company also announced the anticipated restart of the Crane Clean Energy Center and the addition of 2,800 megawatts of renewable energy since 2020, with plans to introduce 2,000 megawatts of new nuclear capacity by 2027. These are among the recent developments for Constellation Energy.
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