CEG Rises 62.3% in a Year: Should You Buy, Sell, or Hold the Stock?

Constellation Energy Corporation’s CEG shares have rallied 62.3% in the past year compared with the Zacks Alternate Energy – Other industry’s growth of 53.9%. The company benefits from strategic capital expenditure that should help acquire nuclear fuel and increase inventory levels. CEG is also set to take advantage of the growing demand from data centers.
 

Another operator, Duke Energy DUK, has gained 3.6% in the past year. Duke Energy is also actively pursuing nuclear energy expansion as part of its long-term clean energy strategy, particularly in the Carolinas. Long-term growth should be fueled by the substantial economic development that the company anticipates from data centers and advanced manufacturing.

Is it a good time to add CEG stock to your portfolio now? Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects.

Advantageous Factors for CEG Stock

Constellation Energy is benefiting from its diverse power generation portfolio by achieving a competitive edge in the clean energy sector, meeting growing customer demand for reliable and carbon-free energy, and navigating energy transitions effectively.

Constellation Energy’s large nuclear fleet positions it as a leader in providing reliable, zero-carbon electricity, which is increasingly important as the world focuses on reducing greenhouse gas emissions. Its nuclear fleet capacity factor was an impressive 94.8% in the second quarter of 2025.

CEG expects capital expenditures of nearly $3 billion and $3.5 billion for 2025 and 2026, respectively. Nearly 35% of projected capital expenditures are for the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels.

Constellation Energy’s robust nuclear infrastructure enables it to fulfill the increasing demand from power-intensive businesses, such as data centers. CEG focuses on powering data centers "behind the meter" by co-locating and connecting them directly to existing nuclear energy generation facilities to avoid the need to transport power long distances over high-power transmission lines. This ensures data centers have direct access to a reliable supply of energy.

CEG has started implementing plans to upgrade plants to achieve more output with no incremental operation and maintenance (O&M) expenses. Due to its strong cost management, the company expects adjusted O&M expenses to decline in 2025. In the second quarter of 2025, CEG was able to reduce O&M expenses by 1.7% year over year.

CEG Stock’s Earnings Estimates

The Zacks Consensus Estimate for 2025 earnings per share indicates a decrease of 0.42% and the same for 2026 implies an increase of 2.86% in the past 60 days. 
 

Another company, The Southern Company SO, successfully completed the construction of Plant Vogtle Units 3 and 4, highlighting its expertise in nuclear energy, a critical component of the U.S. clean energy transition. Southern Company continues to advocate for new nuclear development, positioning itself as a leader in low-carbon baseload generation. The bottom-line estimate for 2025 and 2026 indicates no change in the past 60 days.

CEG’s Earnings Surprise History

The company’s earnings are consistent. It delivered an average earnings surprise of 4.13% in the last four reported quarters.
 

Duke Energy beat on earnings in three of the trailing four quarters and missed in one, delivering an average surprise of 3.12%.

CEG’s Return on Equity Higher Than Industry

Constellation Energy’s trailing 12-month return on equity of 21.61% is better than the industry average of 8%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.

CEG’s Capital Return Program

Constellation Energy continues to enhance shareholder value through share repurchases and regular dividends. Since 2023, CEG’s board of directors has authorized the repurchase of up to $3 billion of the company's outstanding common stock. As of June 30, 2025, there was approximately $540 million of remaining authority to repurchase shares of the company's outstanding common stock.

CEG pays a quarterly dividend to its shareholders. The company aims to increase its annual dividend by 10%, subject to its board's approval. Check CEG’s dividend history here.

CEG Stock Trades at a Premium

Constellation Energy is currently trading at a premium compared to its industry on a forward 12-month P/E basis.
 

Southern Company is also trading at a premium compared with its industry’s P/E F 12M.

Conclusion

Constellation Energy’s capital expenditures are focused on the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels. The company is also strategically positioning itself to fulfill the increasing energy demands of data centers, especially those in the AI industry.

However, investors can hold onto this Zacks Rank #3 (Hold) stock at present and continue to enjoy the benefits of regular dividends and share repurchase programs. Given its premium valuation, new investors may want to wait for a better entry point.

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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