Constellation Energy Given Neutral Rating and $305 Target Citing PJM Power Tightness
CEG•Goldman Sachs assigned Constellation Energy a Neutral rating and $305 price target, noting PJM’s structural supply shortfall and 3% annual demand growth through 2035. With over 40 GW of retirements since 2010, reserve margins could fall to 7% by 2030, pushing capacity prices above $325 per megawatt-day.
1. Rating Initiation
Goldman Sachs initiated coverage of Constellation Energy with a Neutral rating and set a $305 price target, citing PJM power market tightness and premium valuation of its nuclear fleet.
2. PJM Market Dynamics
The PJM grid serves 67 million customers and about 35% of U.S. data center capacity; over 40 GW of thermal capacity have retired since 2010 while demand rises at a projected 3% annual rate through 2035.
3. Impact on Constellation Energy
Goldman projects Constellation’s potential total return at 17%, noting that its nuclear assets and $305 target reflect scarcity value, while elevated capacity auction prices above $325 per megawatt-day support earnings stability.
4. Outlook and Risks
Reserve margins could shrink from approximately 23% in 2026 to 7% by 2030, sustaining high capacity prices but facing risks from PJM’s proposed Reliability Backstop Procurement mechanism and delays in data-center power contracts.
