Cramer’s Morning Thoughts: 20 Stocks to Watch

10. Constellation Energy Corporation (NASDAQ:CEG)

Number of Hedge Fund Investors: 71

Morgan Stanley raised its price target for Constellation Energy Corporation (NASDAQ:CEG) from $233 to $313 per share, driven by the company’s plan to restart the Three Mile Island nuclear plant and supply power to Microsoft Corporation (NASDAQ:MSFT). The latest Morning Thoughts post pointed out that this price target hike reflects growing optimism around Constellation Energy Corporation (NASDAQ:CEG)’s strategic moves and its partnership with Microsoft, which could significantly boost the company’s future growth.

“Morgan Stanley raised Constellation Energy ’s price target to $313 per share from $233. Constellation plans to restart Three Mile Island and send power to Microsoft.”

Constellation Energy Corporation (NASDAQ:CEG) offers a strong investment opportunity due to its solid financial performance, operational efficiency, and strategic focus on clean energy. In Q2 2024, Constellation Energy Corporation (NASDAQ:CEG) reported a GAAP net income of $814 million, or $2.58 per share, which is a slight increase from the previous year. Its adjusted operating earnings also grew, indicating steady profitability despite challenges in the energy sector.

A significant contributor to this success is Constellation Energy Corporation (NASDAQ:CEG)’s nuclear operations, which produced 45,314 gigawatt-hours (GWh) in Q2 2024, up from 41,895 GWh in the same quarter last year, achieving an impressive 95.4% capacity factor. This reflects enhanced operational efficiency.

Constellation Energy Corporation (NASDAQ:CEG) is also committed to returning value to shareholders, evidenced by $500 million in stock repurchases during the quarter. Furthermore, Constellation Energy Corporation (NASDAQ:CEG) is dedicated to sustainability, as highlighted in its 2024 Sustainability Report, positioning it as a leader in the shift towards clean energy. This focus is attractive to environmentally-conscious investors.

ClearBridge Global Infrastructure Value Strategy stated the following regarding Constellation Energy Corporation (NASDAQ:CEG) in its first quarter 2024 investor letter:

“On a regional basis, the U.S. and Canada was the top contributor for quarter, with U.S. electric utility Constellation Energy Corporation (NASDAQ:CEG) and U.S. rail operator CSX the lead performers. Constellation Energy is primarily a nuclear generation company and is the largest producer of carbon-free electricity in the U.S., serving states including New York, Illinois, Maryland, Pennsylvania and New Jersey. The company’s combined generation capacity is more than 32 GW and 90% of annual output is carbon free. Constellation has been a beneficiary of AI and subsequent power demand as its 24/7 base load nuclear generation can get premium contracts.”