Goldman Sachs maintained a Neutral rating on Constellation Energy in its Oct. 6, 2026 report, with a price target of $305. Against a current share price of $267.62, that implies about 14% upside. The bank said Constellation’s new nuclear power purchase agreements with Google are a positive signal for both the company and the sector, but added that the stock still looks less compelling on valuation than other independent power producers.
The report said the agreements total about 3.6 GW and lift Constellation’s contracted nuclear capacity ratio from 13% to 28%. Goldman described contract momentum as improving, while noting that whether this case can be repeated will depend on whether PJM policy produces any negative outcome.
Two-part agreement totals about 3.59 GW
According to the report, Constellation and Google signed a 20-year PPA to add nuclear capacity in the PJM grid.
The first part covers 890 MW of nuclear uprates across 11 units in Illinois, Pennsylvania, and New Jersey. Initial power deliveries are scheduled for 2028.
The second part is a 15-year PPA tied to 2,700 MW of Constellation’s existing nuclear fleet in PJM.
Taken together, the two parts amount to about 3.59 GW. The agreement also includes demand flexibility integration, allowing reductions in non-critical power use during high-stress events.
Constellation committed to invest more than $4.3 billion. Goldman said not all of that should be treated as incremental spending, because some uprate opportunities had already been disclosed earlier. The agreement also covers development of new clean generation, storage, and demand response, with PJM listed as the priority market.
Goldman estimates $449 million to $1.167 billion upside to FCFbG
Goldman cited sensitivity data previously disclosed by Constellation: for each 1 GW nuclear PPA priced at a $20 to $50/MWh premium to the production tax credit floor, pre-growth free cash flow, or FCFbG, could rise by $125 million to $325 million.
Applied to 3.59 GW, that points to roughly $449 million to $1.167 billion of FCFbG upside.
Goldman said that range equals 5% to 14% of its 2030 FCFbG estimate. Its calculation uses pricing assumptions of $64.75 to $94.75/MWh. The actual contract price was not disclosed, and the bank said it is waiting for more detail from the third-quarter earnings call.
Forecasts and valuation framework
Goldman’s model projects 2026E revenue of $37.336 billion, EBITDA of $8.451 billion, and earnings per share of $11.98. For 2027E, it forecasts revenue of $39.214 billion and EPS of $13.23. For 2028E, it projects revenue of $41.188 billion and EPS of $17.09.
The report also shows free cash flow yield rising from 1.3% in 2026E to 7.3% in 2028E.
The $305 target price is based on a 21x price-to-earnings multiple and a 5.0% free cash flow yield. Goldman said that target corresponds to 23x 2027E EPS of $13.23, or 17.8x 2028E EPS of $17.09.
Contracted ratio rises to 28%, still below some peers
After the deal, contracted nuclear capacity as a share of Constellation’s total nuclear fleet rose to 28%. Goldman said the ratio had been 13% a week earlier, a 19 percentage point increase in one week. It also said Constellation still has the highest proportion of uncontracted capacity available to sign.
In Goldman’s peer comparison, Talen Energy stands at 86%, Vistra at 52%, Constellation at 28%, and NRG at about 1% for contracted nuclear capacity. The bank said Constellation has the largest remaining contracting runway, and that recent progress has been notable.
PJM and IRAS remain the key variables
Goldman said investors had broadly doubted whether PPAs could be signed in PJM, and that this agreement may mark the start of a shift in sentiment. It added that if the IRAS ruling and other policy headlines do not turn negative, Constellation and other independent power producers could see a more durable rerating.
Still, Goldman kept its Neutral rating. The report said Constellation’s valuation remains less attractive than that of other independent generators. Risks listed by the bank include regulatory and interconnection risk, power prices coming in above or below expectations, and data center demand either accelerating or slowing.
Goldman said it is watching the company’s third-quarter earnings call, PJM’s pending RBP process, and the IRAS ruling due by Oct. 12. Those policy milestones, the report said, will determine whether any rerating can move from sentiment into fundamentals. PJM’s capacity market reform and interconnection queue reform are also moving forward, and policy direction will directly affect the pace of contracting for independent power producers.
On whether the momentum from the 3.6 GW agreement can continue after lifting the contracted ratio from 13% to 28%, Goldman did not offer a firm answer and said policy clarity is still needed.
Source note
The ratings, price target, earnings forecasts, and related judgments cited here come from a Goldman Sachs report dated Oct. 6, 2026, as summarized by TechFlowPost. The source text also states that those views represent the analyst and the institution only, and do not constitute investment advice.
