Why Constellation Energy Stock Is Rising Today
Key Points
Constellation has signed a new power purchase agreement for its nuclear power plant in Maryland.
Shares of Constellation are trading at 2.7 times trailing sales.
Constellation is a compelling option for conservative investors seeking exposure to nuclear energy.
Starting off October on a bullish note, Constellation Energy (NASDAQ:CEG) stock is powering higher today after the power producer announced a new power purchase agreement with Amazon.
As of 1:06 p.m. ET, shares of Constellation Energy are up 2.3%, paring back an earlier gain of 6.4%.
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Maryland's only nuclear power plant is about to get a lot more powerful
Constellation and Amazon announced yesterday that they have inked a 20-year, 690-megawatt power agreement that will support $3 billion in facility upgrades and the expansion of the Calvert Cliffs Clean Energy Center, which includes two nuclear reactors, in Maryland.
The investment will help Constellation add about 190 megawatts between 2030 and 2032 to the facility, which currently has a 1,790-megawatt generation capacity.
Additionally, the two companies announced a related retail supply agreement to support Amazon operations in the 13-state PJM market, where electricity is bought, sold, and distributed across the Mid-Atlantic and parts of the Midwest.
Is it too late to buy Constellation stock now?
Unlike stocks of companies developing advanced nuclear reactors, Constellation stock offers investors a more conservative way to gain exposure to the nuclear renaissance the United States is currently experiencing. While shares of Constellation are bumping higher today, they have hardly soared to a valuation that would make them undesirable, trading at only 2.7 times trailing sales.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Constellation Energy. The Motley Fool has a disclosure policy.