Constellation Energy has lost some of its spark. Shares of the power-generation company have slid about 20% from their October peak above $410, cooling one of the utilities sector’s hottest trades. But the drop may offer investors a fresh entry point into a company straddling two powerful trends: nuclear expansion and the energy demands of artificial intelligence.

Constellation reported mixed third-quarter results this week. Adjusted earnings of $3.04 a share missed Wall Street’s $3.12 estimate, though revenue rose slightly to $6.57 billion, topping forecasts by about $20 million. Management narrowed its full-year outlook to $9.05–$9.45 a share, signaling confidence in pricing and output despite cost pressures.

The company’s performance was buoyed by higher nuclear generation and fewer outages, offset partly by weaker tax-credit revenue. Executives highlighted 46.5 terawatt hours of nuclear generation in the quarter, along with 995 megawatts of new or uprated capacity. More additions are on the way, including up to 900 megawatts of new uprates and 1,000 megawatts of demand-response projects.

Constellation has become an unusual bridge between the stodgy world of utilities and the white-hot race to power AI data centers. That link has driven significant investor enthusiasm this year, pushing the stock to record highs before its recent fall. Analysts still expect annual earnings growth of roughly 18% through 2027, a rate that far outpaces the broader sector.

Valuation remains reasonable for that growth profile. The stock trades at about 25 times expected 2025 earnings—a price/earnings-to-growth ratio near 2, typical for “growth at a reasonable price” candidates. If projections hold, next year’s operating earnings of $11.49 a share would justify a valuation near $410, roughly back to the prior peak.

Risks remain. Energy prices in the day-ahead and real-time markets are volatile, capacity-auction swings can squeeze margins, and nuclear operations carry inherent costs and hazards. Political or regulatory shifts could also disrupt expansion plans. Still, Constellation’s position as the largest U.S. nuclear operator and a key supplier to hyperscale AI facilities provides a long runway for earnings.

Technically, the stock has broken support around $350 and could test the $290–$300 range, near its 200-day moving average. That zone has marked previous turning points, suggesting a potential entry level for long-term investors.

For now, the pullback looks less like a power failure and more like a chance to reconnect.

The post A Power Play: Constellation’s 20% Decline May Light Up Value Investors appeared first on citybiz.

This contant was orignally distributed by Citybiz. Blockchain Registration, Verification & Enhancement provided by NewsRamp™. The source URL for this press release is A Power Play: Constellation’s 20% Decline May Light Up Value Investors.