Constellation Energy Downgraded By KeyBanc Amid Capital Expenditure And FCF Deployment Developments

KeyBanc Capital Markets analyst Sangita Jain downgraded Constellation Energy Corp CEG to Sector Weight from Overweight.

The company's shares moved closer to the analyst's price target. The analyst notices that the company's previously disclosed comprehensive capital expenditure plan, share buyback program, and FCF deployment plan is playing out. 

The analyst thinks the passage of the IRA, with its 10-year nuclear PTC provision, offers CEG's nuclear fleet a downside price protection.

The analyst sees CEG trading ahead of other clean energy developers and the limited scope of multiple expansions in the short term.

Jain expects CEG's attainment of H2 hub funding later this fall to determine the fate of the temporarily on-hold $900 million H2 investment. 

Jain raised the estimate for EBITDA to $3.126 billion (from $3.095 billion, consensus: $3.231 billion) in 2023 and $3.791 billion (from $3.717 billion, consensus: $3.703 billion) in 2024.

Also, the analyst revised the estimate for revenues to $27.681 billion (from $27.650 billion, consensus: $21.622 billion) in 2023 and $28.732 billion (from $28.658 billion, consensus: $24.486 billion) in 2024. 

Also Read: Health Of The Planet - CVS Health Inks Deal To Purchase Renewable Energy From Constellation

Price Action: CEG shares are trading lower by 1.5% at $90.61 on the last check Wednesday.