CEG Stock Underperforms Industry in a Month: What Should You Do Now?

Constellation Energy Corporation’s CEG shares have rallied 2% over the past month compared with the Zacks Alternate Energy – Other industry’s growth of 13%. The company stands to benefit from growing data center demand, supported by its nuclear fleet, which delivers reliable, uninterrupted clean power.
 

Other companies like Duke Energy DUK and The Southern Company SO have gained 8% and 7.7%, respectively, during the same period. Duke Energy is also actively pursuing nuclear energy expansion as part of its long-term clean energy strategy, particularly in the Carolinas. Southern Company is one of the leading U.S. electric utilities serving the fast-growing Southeast market, operating in a high-barrier, recession-resistant industry that offers stable performance and attractive return potential.

Given the current underperformance in price, should you consider adding Constellation Energy to your portfolio? Let's examine the factors in detail and assess the investment prospects.

Factors Driving the Performance of CEG Stock

Constellation Energy is taking advantage of the rising demand for clean energy by utilizing its diverse portfolio, especially its nuclear fleet. This enables it to satisfy customer needs, boost sales and support the transition to carbon-free energy. The company is also able to better negotiate market dynamics and seize opportunities, thanks to its emphasis on innovation and significant investments in sustainable energy technologies.

Nearly 90% of Constellation Energy’s annual energy output comes from carbon-free sources, and the company has set a goal to produce 95% carbon-free electricity by 2030 and 100% by 2040. This initiative can help CEG lower operational costs by focusing on new and advanced assets.

The completion of the Calpine acquisition strengthens Constellation Energy’s growth prospects by expanding its presence in competitive power markets and adding efficient gas-fired assets. This improves earnings diversification, cash flow stability and operational flexibility while complementing the company’s nuclear-led clean-energy platform, positioning it to benefit from rising power demand and grid reliability needs.

In February 2026, Constellation Energy’s Calpine unit signed a new 380-megawatt (MW) agreement with CyrusOne to connect and serve a new data center adjacent to the Freestone Energy Center in Freestone County, TX. The project also allows the company to leverage its existing generation and grid infrastructure, enhancing operational efficiency and strengthening its position as a preferred energy partner.

CEG Stock’s Earnings Estimates

The Zacks Consensus Estimate for 2026 earnings per share (EPS) has improved 0.62% in the past 60 days. CEG’s long-term (three to five years) earnings growth rate is 15.42%.
 

The Zacks Consensus Estimate for Duke Energy’s 2026 EPS has moved north 0.15% in the past 60 days. DUK’s long-term earnings growth rate is 6.87%. The bottom-line estimate for Southern Company 2026 EPS has moved south 0.22% in the past 60 days. BE’s long-term earnings growth rate is 7.23%.

CEG’s Earnings Surprise History

The company’s earnings are consistent. It delivered an average earnings surprise of 3.23% for the trailing four quarters.

CEG’s Return on Equity Higher Than Industry

Constellation Energy’s trailing 12-month return on equity of 21.59% is better than the industry’s average of 6.39%. 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 Sept. 30, 2025, there was approximately $593 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.

What Should Investors Do Now?

Constellation Energy is capitalizing on rising clean-energy demand through its nuclear-heavy, carbon-free portfolio, targeting 95% carbon-free power by 2030 and 100% by 2040 while enhancing cost efficiency and innovation. Its Calpine acquisition and the new 380-MW data center agreement with CyrusOne at the Freestone Energy Center strengthen earnings diversification, cash flow stability and growth potential amid rising electricity demand.

However, investors may consider holding this Zacks Rank #3 (Hold) stock for now and continue to benefit from its 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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