Why Talen Energy (TLN) Is Advancing Today

Electricity producer Talen Energy (TLN) is climbing 4% today after Bank of America started coverage of the name with a Buy rating.

Why Bank of America Is Bullish on Talen

After Talen agreed to provide power to Amazon’s (AMZN) AWS unit via its Susquehanna nuclear plant,  the bank estimates that the deal will lift TLN’s annual EBITDA by $110 million starting in 2027. In the year that ended in September, the company’s total EBITDA came in at $737 million.

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

Meanwhile, Bank of America believes that Talen’s inclusion in the PJM regional transmission organization should enable it to be boosted by high electricity prices. That’s because the PJM region is characterized by relatively low supply of electricity and increasing demand for the commodity, according to the bank.

Moreover, Talen has agreements in place that are guaranteed to generate $110 million of revenue between May 2025 and 2029, added Bank of America.

The bank placed a $253 price target on TLN.

More About TLN

Analysts, on average, expect the company’s earnings per share to climb to $7.56 this year from $7.14 in 2024.

In the last month, the shares have climbed 5.4%, while they are up 35% in the last three months.

While we acknowledge the potential of TLN, 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 TLN 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.