Why Constellation Energy (CEG) and Walgreens (WBA) Are Rallying Today

Constellation Energy (CEG) and Walgreens (WBA) are among today’s biggest winners. Both names are jumping around 13% in early trading.

Constellation, which generates electricity from multiple sources, including nuclear reactors, disclosed that it had agreed to acquire Calpine in a $26.6 billion deal. Calpine specializes in generating electricity from natural gas that emits relatively low levels of pollutants, including carbon. Also noteworthy is that Calpine is investing significant amounts in carbon-capture technology and renewable energy.

An aerial view of a nuclear plant, its domes casting a unique shadow.

Calpine reports that it is operating 79 “energy facilities” which can power about 27 million homes. Moreover, according to Constellation, the two companies will have a combined total of almost 60 gigawatts of power-generating capacity from zero-and-low carbon-emitting sources.

Because Calpine is not a regulated utility, it can sell its electricity at whatever price buyers will pay.

The $26.6 billion purchase price includes cash and stock while factoring in debt as well.

Meanwhile, Walgreens reported that its revenue during its first quarter that ended in November had climbed 7.5% versus the same period a year earlier to $39.5 billion. That was $2 billion above analysts’ average estimate. Further, it generated earnings per share, excluding certain items, of 51 cents, well above the mean outlook of 38 cents.

However, the drugstore chain reiterated its full-year adjusted EPS guidance of $1.40 to $1.80. Analysts’ average estimate was $1.53.

“Our first quarter results reflect our disciplined execution against our 2025 priorities: stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models,” CEO Tim Wentworth said in a statement.

While we acknowledge the potential of CEG, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.