How Is CEG leveraging Natural Gas to Support Growth & Grid Stability?

Constellation Energy Corporation CEG sells natural gas, electricity, and other energy-related goods and sustainable solutions through its integrated business operations. It gains from the ample and reasonably priced natural gas supply, which puts the company in a favorable position in the energy market.

Natural gas plants offer flexible, dispatchable power that helps stabilize the grid and balance renewable sources like solar and wind.

CEG owns and operates three dual-fuel facilities, and its ability to run electricity generating units on either oil or clean natural gas makes it important, when there is a shortage in electricity production from renewable sources. Customers are guaranteed a steady and reliable power supply due to CEG's ability to adapt to changes in fuel prices and availability.

In addition to successfully operating a large nuclear fleet, CEG generates power from almost 10 gigawatts (“GW”) of natural gas, oil, hydropower, wind, and solar assets. Nearly 10% of the total electricity supply in 2024 came from its owned natural gas, oil, and renewable energy plants (measured in GWhs).

In January 2025, CEG announced its plan to acquire Calpine Corporation, with the deal expected to be closed in the fourth quarter of 2025. This deal will combine the largest producer of clean, carbon-free energy with Calpine’s reliable, dispatchable natural gas assets, creating the nation’s leading competitive retail electric supplier. Calpine operates natural gas, geothermal, battery storage, and solar assets, with a total generation capacity exceeding 27 GW.

Strategic Gas Investments Boost Utilities’ Transition Plans

Other utilities are investing and expanding natural gas operations to support grid stability during peak demand.

Xcel Energy’s XEL recent resource plan, approved by the MPUC, includes 420 megawatts (MW) of natural gas and 300 MW of battery storage by 2028. XEL’s investment plan includes $3.4 billion in natural gas operation during 2025-2029. 

Duke Energy DUK expects to spend $87 billion during the 2025-2029 period, out of which 12% will be employed for hydrogen-enabled natural gas technologies. The company has also entered into a strategic partnership with GE Vernova to secure advanced natural gas turbines, potentially up to 11 of GE Vernova's 7HA units.

CEG Stock’s Earnings Estimates

The Zacks Consensus Estimate for 2025 and 2026 earnings per share 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 28.9X compared with the industry average of 21.95X.

CEG Stock’s Price Performance

In the past six months, CEG’s shares have risen 47.1% compared with the industry’s 30.5% 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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