Can CEG's Use of Small Modular Reactors Redefine Nuclear Efficiency?

Constellation Energy Corporation CEG is focusing on the development and potential deployment of Small Modular Reactors (“SMRs”) to address the growing energy requirements of customers, including data centers and artificial intelligence operators. The company sees SMRs as a scalable, carbon-neutral power solution that can leverage existing nuclear sites and infrastructure for faster deployment. This will improve CEG’s overall performance and help it create new revenue sources.

Compared to conventional big reactors, SMRs' modular design enables factory prefabrication and quicker on-site assembly, greatly cutting down on construction delays. Additionally, by reducing upfront expenses, this modular strategy makes projects less risky and more attractive for financing. This aligns with CEG’s goal of providing a reliable, 24/7 clean energy solution.

CEG intends to use existing land, water access, grid connections, and security infrastructure to host SMRs at its current nuclear plant locations, thereby increasing deployment efficiency.

Constellation Energy and Rolls-Royce Holdings plc signed a Memorandum of Understanding in 2020 to pursue the potential for CEG to operate compact nuclear power stations both in the United Kingdom and internationally. CEG will be using its operational experience to assist Rolls-Royce in the development and deployment of the SMRs.

CEG is also evaluating strategies to extend the plant’s existing early site permit or seek a new construction permit from the Nuclear Regulatory Commission (“NRC”) to pursue development of an advanced nuclear reactor or SMR at the Clinton Clean Energy Center site.

Companies Benefiting From Small Modular Reactors

SMRs have faster build times than traditional large reactors, allowing for quicker integration into the grid and creating new revenue streams. Other companies taking advantage of SMRs are:

NuScale Power Corporation SMR: Leveraging proven technology and extensive investment, the NuScale Power Module is the only NRC-approved small modular reactor technology on the market that is commercially ready to deploy.

GE Vernova GEV is a key player in the development and deployment of SMRs, particularly through its BWRX-300 design. This strategic position allows it to secure early projects and establish itself as a leader in advanced nuclear technology.

CEG Stock’s Earnings Estimates

The Zacks Consensus Estimate for 2025 and 2026 EPS indicates an increase of 8.54% and 25.99%, respectively, year over year.

CEG Stock Trading at a Premium

CEG is trading at a premium relative to the industry, with a forward 12-month price-to-earnings of 28.67X compared with the industry average of 20.83X.

CEG Stock’s Price Performance

In the past year, CEG’s shares have risen 62.5% compared with the industry’s 57.1% growth.

CEG’s Zacks Rank

CEG currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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