Constellation Energy Group Inc. (CEG) awarded a generator replacement project valued at approximately $ 50 million to Mitsubishi Power Systems Americas Inc.
The generator replacement will be done at the Ginna Nuclear Power Plant in Ontario, New York. Per the contract, Mitsubishi will install a new electrical generator and excitation system including related auxiliaries during a planned refueling and maintenance outage.
The Ginna Nuclear plant is part of Constellation Energy Nuclear Group, LLC. Constellation Energy Nuclear Group is the company’s joint venture with Électricité de France Group. The plant employs more than 500 people and is licensed to operate its nuclear power reactor until 2029. Constellation Energy Nuclear Group operates five nuclear reactors at three sites in New York and Maryland.
Based in Baltimore, Maryland, Constellation Energy supplies energy products and services in North America. The company operates in three segments: Merchant Energy, Regulated Electric and Regulated Gas.
Constellation Energy remains diversified among owned generation, contractual generation, regulated distribution and competitive supply of energy. Its diverse fleet of power generating units located across the U.S. and Canada is a mix of coal, oil, natural gas and renewable sources (including geothermal, solar, hydro-electric and biomass). Diversified generation assets help Constellation Energy minimize the impact of volatile commodity prices on its input costs.
However, we believe that the above positives have already been reflected in the current valuation of Constellation Energy, leaving little room for above-market gains. Also, in the near term, the fortunes of the company appear a little bleak due to a tepid Maryland economy, risks in the merchant power space, pending regulatory cases and a low-dividend yield, which continue to restrain valuation in the near term.
We have a Zacks #3 Rank (short-term Hold recommendation) on Constellation Energy shares. This implies that the stock is expected to perform in line with the broader U.S. equity market over the next 1–3 months. Our long-term ‘Neutral’ rating on Constellation Energy also supports this view, suggesting investors against taking any position on the stock for the time being.
A window of opportunity however is offered by its Zacks #1 Rank (short-term Strong Buy recommendation) peers like El Paso Electric Company (EE) and Companhia Paranaense de Energia (ELP).
CONSTELLATN EGY (CEG): Free Stock Analysis Report
EL PASO ELEC CO (EE): Free Stock Analysis Report
COPEL-ADR PR B (ELP): Free Stock Analysis Report
Zacks Investment Research
Be the first to comment