On Tuesday morning, Shahriar Pourreza of Wells Fargo reduced his fair value assessment for Constellation Energy shares from $478 to $460, while maintaining an overweight recommendation. Investors responded by selling, driving the stock down roughly 4% on the day. The timing of the adjustment coincides with the Trump administration’s National Energy Dominance Council signing an agreement with Mid-Atlantic governors to urge PJM Interconnection and FERC to impose measures— including price caps—aimed at building more than $15 billion in new baseload capacity and capping wholesale energy prices. Should the initiative succeed, Constellation’s merchant power revenues in the region could face direct downward pressure. The development is especially noteworthy coming less than two weeks after Constellation closed its $26.6 billion acquisition of Calpine, which brought an additional $12.7 billion of debt onto its balance sheet.

Over the next three years, Constellation is positioned to nearly double its generation capacity to approximately 60 GW following the Calpine deal, up from its current 32.4 GW. About 90% of its output today is carbon-free, drawn from its leading nuclear fleet and a mix of hydro, wind and solar assets. With Calpine’s natural gas and geothermal portfolio, Constellation will become the nation’s largest gas-fired generator as well. Management expects to greenlight multiple new gas projects to serve accelerating demand driven by AI data centers, onshoring of manufacturing and electrification trends—factors forecast to boost U.S. electricity consumption by 58% through 2045. In the nuclear segment, Constellation has already secured 20-year power purchase agreements with Microsoft for 835 MW at Three Mile Island Unit 1 and with Meta Platforms for 1.1 GW at the Clinton site. These deals set the stage for additional PPAs and potential participation in an $80 billion federal initiative to build new reactors, underpinning steady earnings growth through 2029 and beyond.