Constellation Energy Awarded Significant Contracts by GSA
In a significant development, Constellation Energy (NYSE: CEG) has been awarded more than $1 billion in contracts by the General Services Administration (GSA), including a 10-year contract to supply the GSA with over 1 million megawatt-hours (MWhs) annually.
11c and 12c Earnings Increase Anticipated
BofA Securities has reaffirmed its Buy rating on Constellation Energy, citing the significant contracts awarded by the GSA. The analyst expects this deal to lead to a 11 cents increase in 2025 earnings and a 12 cents increase in 2026 earnings compared to prior forecasts.
Deal at a Premium to PJM Power Prices
The GSA contract is notable not only for its size but also for being at a significant premium to PJM power prices. This suggests that Constellation Energy will be able to command a higher price for its electricity, which should boost its earnings prospects.
Implications for Investors
For investors, this development presents an attractive opportunity. With the GSA contract in place, Constellation Energy is well-positioned to benefit from the growing demand for renewable energy and energy efficiency initiatives.
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