12 AI Updates Worth Taking a Look At

3. Talen Energy Corporation (NASDAQ:TLN)

Number of Hedge Fund Holders: 77

Talen Energy Corporation (NASDAQ:TLN) generates and sells electricity in U.S. wholesale markets, operating nuclear, fossil, solar, and coal plants while developing battery storage projects.

On February 21, Evercore initiated coverage on Talen Energy with an Outperform rating and a $287 price target. The firm sees opportunities in the divergence between power generation assets and load growth, particularly in independent power producers. Despite a 254% stock gain over the past year, Talen’s upside potential and strong free cash flow remain undervalued. Its AWS contract, though concentrated, is viewed as comparable to nuclear generation peers. Using a blended EV/EBITDA and free cash flow yield valuation, Evercore projects a 30% total return. From 2025 to 2027, over 50% of adjusted EBITDA is expected to convert to free cash flow, with more than 70% returned to shareholders through buybacks. Talen may further benefit from increasing electricity demand and higher power prices in “Data Center Alley.”