How Is CEG Using Acquisitions to Accelerate Clean Energy Growth?
In January 2025, Constellation Energy announced to acquire Calpine in a cash and stock transaction valued at an equity purchase price of nearly $16.4 billion. The agreement will combine the nation's leading clean energy producer with Calpine's reliable, dispatchable natural gas assets, opening up opportunities to supply more customers coast-to-coast. In June 2025, CEG received regulatory approval from the New York State Public Service Commission and the deal is expected to be closed in the fourth quarter of 2025.
This acquisition is expected to significantly boost CEG's earnings per share (EPS) by more than 20% in 2026, and further add at least $2 to EPS through 2029. Additionally, the combined company is projected to generate more than $2 billion in free cash flow before growth annually.
In 2023, CEG also acquired a 44% ownership stake in the South Texas Project Electric Generating Station for $1.75 billion. This transaction included nearly 1,100 megawatts (MW) of the plant's output, expanding CEG's carbon-free nuclear fleet.
CEG is benefiting from its strategic acquisitions. This enhances its position as a leading clean energy provider, expanding its customer base and increasing financial strength. The company's strategic acquisitions are projected to deliver immediate earnings accretion, significant free cash flow and opportunities to reinvest in clean energy technologies.
Utilities Expanding Through Acquisitions
Some other utility companies that are also focused on expanding operations through acquisitions have been discussed below:
NRG Energy NRG will acquire a portfolio of natural gas generation facilities and a commercial and industrial virtual power plant platform from LS Power. The acquisition will double NRG's generation capacity to 25 GW, adding modern, flexible natural gas assets.
Vistra Corp. VST has executed a definitive agreement to acquire seven modern natural gas generation facilities, totaling nearly 2,600 MW of capacity, from Lotus Infrastructure Partners. The deal is expected to be closed in late 2025 or early 2026.
CEG Stock's Earnings Estimates
The Zacks Consensus Estimate for Constellation Energy's 2025 and 2026 EPS indicates an increase of 9% and 22%, respectively.
Image Source: Zacks Investment Research
CEG Stock Trading at a Premium
CEG is trading at a premium relative to the industry, with a forward 12-month price-to-earnings of 30.08X compared with the industry average of 20.72X.
Image Source: Zacks Investment Research
CEG Stock's Price Performance
In the past six months, CEG's shares have risen 29.8% compared with the industry 's 13.2% growth.
Image Source: Zacks Investment Research
CEG's Zacks Rank
CEG currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Higher. Faster. Sooner. Buy These Stocks Now
A small number of stocks are primed for a breakout, and you have a chance to get in before they take off.
At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We've combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.
You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.
Download the report free now >>
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
32 minutes ago
- Globe and Mail
Should You Buy American Express While It's Below $315?
Key Points American Express continues to report solid revenue growth, with younger consumers propelling the business forward. A strong brand and a powerful network effect support American Express' competitive position. The stock doesn't look cheap at the current price. 10 stocks we like better than American Express › American Express (NYSE: AXP) has been around for 175 years, which showcases the durability of its business model. It's not going to turn heads by posting outsized growth like a younger, more tech-driven company will. The credit card and financial services enterprise does have staying power, though. This stock has put up a phenomenal gain in the past five years, producing a total return of 244%. While I don't believe this kind of performance will repeat through the rest of this decade, there's no question that American Express is a high-quality business that deserves a closer look. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Should you buy the shares as they trade below $315 (as of July 25)? Warren Buffett's stamp of approval The great Warren Buffett has a stringent filter for what Berkshire Hathaway owns in its portfolio. So investors should take notice of the fact that American Express is one of the top holdings for the conglomerate. This means that the company must have some merits. One area worth mentioning is the company's durable performance in these uncertain economic times. Through the first six months of 2025, Amex's revenue increased 8.4% year over year to $34.8 billion. As mentioned, that growth isn't forcing investors to pick their jaws up off the floor. However, I do believe the gains are sustainable. American Express benefits from the general expansion in the overall economy, and from rising spending levels. The company can also "steal" market share from cash- and paper-based transactions -- the rise of digital payments helps Amex. It wouldn't be surprising to see this level of growth continue indefinitely. Recently, Amex has been resonating with younger consumers. Attracting a younger demographic can lead to a lucrative long-term relationship, especially as these customers' financial lives evolve over time, their wealth grows, and they gain more spending power. Leaning on key competitive advantages American Express has built a reputation for being a premium brand in the credit card space. There's a certain level of exclusivity and prestige that comes with being a cardholder. That's supported by high annual fees for its top cards, like the Platinum and the Gold. This naturally brings in more affluent customers who have lower credit risk and the ability to spend more money. The company also charges higher processing fees to merchants than competitors do. Even so, there are 100 million merchant locations that accept Amex payments, as they realize the benefit of having access to such a compelling customer base. In other words, you don't want to lose an Amex cardholder's business. American Express has a unique setup because it also runs the underlying payment infrastructure, connecting merchants with customers. Consequently, there's a network effect in play here. It's a positive feedback look, with more merchants creating more value for cardholders and vice versa. This makes it extremely difficult for American Express to be disrupted or become obsolete. Is the stock cheap or expensive? The past five years have been spectacular for Amex shareholders. But after such a huge gain, investors must assess the current situation with fresh eyes. Is the stock cheap or expensive with the price below $315? The price-to-earnings (P/E) ratio is a useful tool to analyze valuation. Right now, Amex's is 21.9, near its highest level in three years. I don't think the valuation presents a bargain opportunity. In fact, shares might be expensive. Amex's management team forecasts mid-teens earnings-per-share growth over the long term. Assuming it's a 15% annualized gain, which seems realistic, the stock will double in five years. That's with the P/E multiple staying constant. But there's a good chance it will contract, a trend that would lower the stock's return. Investors who are still bullish might want to consider a dollar-cost averaging approach. With this strategy, buying shares below $315 would have less of an effect in the long run. Should you invest $1,000 in American Express right now? Before you buy stock in American Express, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Express wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 28, 2025
CBC
32 minutes ago
- CBC
Why Trump's deals with the EU, Japan may not be templates for Canada in trade talks
Social Sharing U.S. President Donald Trump's successive announcements of deals setting baseline tariffs on the European Union and Japan are prompting questions about whether they're a road map for Canada to follow in trade talks. Trump and European Commission President Ursula von der Leyen described the bones of an agreement on Sunday. It sets across-the-board tariffs of 15 per cent on most European Union exports to the United States, along with a commitment by Europe to invest $600 billion US in the American economy and spend $750 billion on U.S. energy products — although there's plenty of fine print still to come. That makes it broadly comparable to the deal Trump announced last week with Japan: a 15 per cent across-the-board tariff and a Japanese commitment to invest $550 billion in the U.S. Trump was threatening to hit Europe with 30 per cent baseline tariffs and Japan with 25 per cent on Aug. 1, so both trading blocs are selling the deals as wins. Because Canada is facing the threat of 35 per cent tariffs on some goods on the same date, does that mean Canada should be aiming for a similar agreement? Prime Minister Mark Carney certainly isn't saying so. Asked whether any forthcoming deal will be "in the ballpark" of those 15 per cent baseline tariffs, he emphasized the differences between Europe's and Canada's trading relationship with the U.S. "We are in a different position, and that is why these negotiations ... are different," Carney said on Monday, citing Canada's geographical closeness and energy exports to the U.S. "Europe, in that agreement yesterday, made commitments to buy American energy," he said at a news conference in Prince Edward Island. "America needs Canadian energy." WATCH | Canada's trade talks with the U.S. are different from Europe's, Carney says: Carney says Canada is 'in a different position' than EU on trade deal with U.S. 15 hours ago Across-the-board tariffs 'difficult for Canada to accept' There are plenty of reasons why a 15 per cent baseline tariff rate is not something for Canada to aspire to, given that its economy is proportionally far more dependent on the U.S. market than Europe's and Japan's are. Jonathan O'Hara, an international trade lawyer in the Ottawa law office of McMillan LLP, said Canada should set its sights on a better deal than the EU or Japan negotiated since it's already so tightly integrated with the American economy. "On a broad level, having some kind of across-the-board tariffs, I think, would be very difficult for Canada to accept," O'Hara said in a weekend interview with CBC News. WATCH | Here's what's in Trump's tariff deal with the EU: Trump, EU reach trade deal framework 1 day ago Yet it appears that Canada doesn't actually face the prospect of tariffs that are truly across-the-board. That's because it has something that neither the European Union nor Japan have: an actual free-trade deal. Trump's "fentanyl emergency" tariffs, currently set at 25 per cent — which he's threatening to raise to 35 per cent on Friday — hit only those goods that don't comply with the rules of origin in the Canada-U.S.-Mexico Agreement (CUSMA). That means the vast bulk of Canada's exports to the U.S. are currently crossing the border tariff-free. Steel and aluminum tariffs a big question That may be why Carney's Liberal government does not feel the same sort of pressure as Europe and Japan to get a deal on Trump's timeline, said Drew Fagan, a professor at the University of Toronto's Munk School of Global Affairs and Public Policy. "Overall, the average tariff on Canadian goods going into the United States is about as low as any place in the world," he told CBC News. "What's important for us is that the [CUSMA] free-trade agreement continues to hold. Whether it will in the future, of course, is a fundamental question." The biggest exceptions to Canada's mostly tariff-free access to the U.S. are steel and aluminum, hit by Trump's 50 per cent global rate as he tries to prop up that sector at home. In their deals reached with the U.S., neither the EU nor Japan are let off the hook from that tariff. While Canada is surely angling for something better on steel and aluminum — such as the U.K.'s 25 per cent tariff, potentially headed to zero — the European and Japanese agreements suggest that will be tough to achieve. Carlo Dade, director of international policy at the University of Calgary's School of Public Policy, said Canada will likely face a tariff rate comparable to Europe's. "The Americans have decided to readjust the terms of trade," Dade said. "The price of access to the U.S. market is going up globally. It appears everyone is going to have to pay an increased cost." There are plenty of signs to suggest that the prospects are slim for Canada to reach a deal by Trump's deadline of Friday: Carney said the talks are complex, his top trade negotiators are downplaying the importance of the deadline and Trump himself is saying there may not be a deal at all.
Globe and Mail
an hour ago
- Globe and Mail
3 Reasons I'm Excited About Energy Transfer Stock in 2025
Key Points Energy Transfer pays a lucrative distribution backed by a strong financial profile. The MLP has visible growth coming down the pipeline. It trades at a low valuation compared with its peer group. 10 stocks we like better than Energy Transfer › Energy Transfer (NYSE: ET) is one of my largest income investments. I'm pleased to have a higher allocation to the master limited partnership (MLP) because of all it offers investors like me. Here are three reasons I'm excited to hold the midstream giant this year. A lucrative and growing income stream My main reason for owning Energy Transfer is its lucrative distribution. With my low cost basis, I earn a yield of more than 10% on this MLP, compared with its current yield of more than 7%. That high-yielding payout is on a very sustainable foundation. The MLP produces very stable cash flow as long-term, fee-based contracts and government-regulated rate structures provide about 90% of its annual earnings. Meanwhile, it distributes a conservative portion of its cash flow to investors. The midstream giant generated $2.3 billion of distributable cash flow during the first quarter, easily covering the $1.1 billion of cash it distributed to investors. That excess free cash flow allows Energy Transfer to invest in its expansion while maintaining a strong financial profile. Its leverage ratio is in the lower half of its 4.0-to-4.5 target range, putting the company in the strongest financial position in its history. This strong financial position also allows it to raise its distribution. Energy Transfer aims to increase its payment every quarter, targeting 3% to 5% annual growth. It has raised its distribution by more than 3% in the past year. A growth acceleration ahead Energy Transfer has ample fuel to continue increasing its high-yield payout. The MLP plans to invest $5 billion in organic expansion projects this year, including the construction of gas processing plants, a new large-scale gas pipeline, and additional export capacity. These projects should add to its cash flow as they launch over the next two years, accelerating earnings growth beyond the 5% expected this year. The MLP also has more expansions planned. For example, it's developing a large LNG export terminal and a pipeline for an AI data center. Catalysts such as growing Permian output, U.S. gas demand, and the growing global need for U.S. natural gas liquids should help fuel its continued expansion. Energy Transfer also boosts its growth rate with strategic acquisitions. While it hasn't announced a deal this year, its affiliate, Sunoco LP, is buying Parkland in a $9.1 billion deal, which will provide Energy Transfer with incremental income. Meanwhile, the company's strong financial profile gives it the flexibility to continue its strategy of consolidating the midstream sector. A low valuation Financially strong companies with visible earnings growth usually trade at a premium valuation. However, that's not the case with Energy Transfer. The MLP currently trades at about 9 times its enterprise value (EV) to EBITDA (earnings before interest, taxes, depreciation, and amortization). That's the second lowest valuation multiple in its peer group and well below the average of around 12 times EV/EBITDA. The MLP's low valuation drives its high distribution yield. It also provides investors with the potential for a higher return through valuation expansion. Income, growth, and value-driven upside potential There are many reasons to be excited about Energy Transfer. The MLP pays a strong, growing distribution supported by its best-ever financial profile. It also has visible growth ahead. To top it off, it trades at a bargain price. These factors could fuel strong total returns in 2025 and beyond, driving my excitement to continue holding the MLP. Should you invest $1,000 in Energy Transfer right now? Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 28, 2025
