- Constellation Energy rose 12.2% on Tuesday, one of the top two S&P 500 gainers, after announcing a 20-year PPA with Google for 890 MW of new nuclear generation via uprates at 11 existing reactors.
- The deal is backed by $4.3B of new Constellation investment and is described as the largest-ever uprate project between a nuclear power provider and a tech company.
- A separate 15-year supply agreement covers another 2,700 MW across the PJM power market.
- Power producers rallied with the news: Talen Energy up 12.4%, Vistra up 10.7%, NRG Energy up 7%, and the Utilities Select Sector SPDR up 3%.
- Nuclear fuel and reactor developers gained: Centrus Energy up 8.8%, Oklo up 7.2%, Cameco up 6.3%, Nano Nuclear Energy up 6.3%, and the Global X Uranium ETF up 4%.
- KeyBanc analyst Sophie Karp called the deal high-quality, low-risk growth that strengthens earnings visibility and supports her bullish view on CEG.
Quotes
“This is exactly the kind of nuclear growth investors should want to see... high-quality, low-risk growth that enhances earnings visibility, derisks the company's capital deployment strategy, and reinforces confidence in how CEG plans to invest its significant cash flow”
“CEG's growth opportunity is driven by its ability to strike commercial deals, not by political debates and outcomes”