Goldman Sachs said in a report dated Oct. 6, 2026 that Constellation Energy’s nuclear power purchase agreements with Google, totaling about 3.6 GW, lifted the share of its contracted nuclear capacity from 13% to 28%. The bank called the agreement a positive signal for both Constellation and the sector, saying contract momentum remains intact.
Goldman kept a Neutral rating on the company and maintained a $305 price target. The report listed the current share price at $267.62, implying 14% upside. Even so, Goldman said Constellation looks less attractive on valuation than other independent power producers, and added that whether this case can be repeated will depend on whether PJM policy delivers any negative outcomes.
Two-part agreement totals about 3.59 GW
According to the report, Constellation signed a 20-year PPA with Google tied to new nuclear capacity in the PJM grid.
The first part covers 890 MW of nuclear uprates across 11 units in Illinois, Pennsylvania, and New Jersey. First power delivery is scheduled for 2028.
The second part is a 15-year PPA covering 2,700 MW from Constellation’s existing nuclear fleet in PJM. Together, the two pieces amount to about 3.59 GW.
The agreement also includes demand flexibility integration, allowing reductions in non-critical electricity use during high-stress events. Beyond the nuclear component, the deal involves development of new clean generation, energy storage, and demand response, with PJM listed as the priority region.
Constellation committed to invest more than $4.3 billion. Goldman noted that not all of that spending is incremental, because some of the upgrade opportunities had already been disclosed.
Goldman estimates $449 million to $1.167 billion upside to FCFbG
Goldman cited sensitivity data previously disclosed by Constellation, saying that if a 1 GW nuclear PPA is priced at a $20 to $50 per MWh premium to the production tax credit floor, pre-growth free cash flow, or FCFbG, would rise by $125 million to $325 million.
Applied to the 3.59 GW size of this agreement, Goldman estimated FCFbG upside at about $449 million to $1.167 billion.
The bank said that range equals 5% to 14% of its 2030 FCFbG estimate for Constellation. The calculation is based on pricing assumptions of $64.75 to $94.75 per MWh. Because the agreement did not disclose a specific price, Goldman said it is waiting for more detail from the third-quarter earnings call.
Revenue, earnings, and free cash flow yield forecasts
Goldman’s report projected 2026E revenue of $37.336 billion, EBITDA of $8.451 billion, and earnings per share of $11.98 for Constellation.
For 2027E, the bank forecast revenue of $39.214 billion and EPS of $13.23. For 2028E, it projected revenue of $41.188 billion and EPS of $17.09.
Free cash flow yield was shown rising from 1.3% in 2026E to 7.3% in 2028E.
Contracted share rises to 28%, still below some peers
The agreement raised Constellation’s contracted nuclear capacity to 28% of its total nuclear fleet. Goldman said that figure had been 13% a week earlier, an increase of 19 percentage points in one week.
The bank added that Constellation still has the highest proportion of contractable nuclear capacity in the group.
Peer comparisons in the report showed Talen Energy at 86%, Vistra at 52%, Constellation at 28%, and NRG at about 1% for contracted nuclear capacity. Goldman said Constellation has the largest remaining contracting runway and has made notable progress recently.
Neutral rating stays in place as Goldman watches PJM and IRAS
Goldman said investors had broadly doubted whether PPAs could be signed in PJM, and that this deal may mark the start of a shift in sentiment. The report added that if the IRAS ruling and other policy headlines do not produce negative outcomes, Constellation and other independent power producers could see a more durable rerating.
Still, Goldman kept its Neutral rating. 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 implies 23x 2027E EPS of $13.23, or 17.8x 2028E EPS of $17.09.
The bank said Constellation remains less compelling on valuation than other independent power producers. Risks listed in the report include regulatory and interconnection risks, power prices coming in above or below expectations, and data center demand either accelerating or slowing.
Goldman said it is focused on Constellation’s third-quarter earnings call, PJM’s pending RBP process, and the IRAS ruling due by Oct. 12. Those policy points, the bank said, will determine whether the current rerating can move from sentiment into fundamentals. PJM’s capacity market reform and interconnection queue reform are also moving ahead, and Goldman said the policy direction will directly affect the contracting pace for independent power producers.
The report ended by noting that the 3.6 GW agreement pushed the contracted share from 13% to 28%, but Goldman did not give an answer on whether that momentum can continue before policy becomes clearer.
Source note
This article is based on a summary and interpretation by Chaoxiang Research of a third-party broker report from Goldman Sachs dated Oct. 6, 2026, combined with public market information. The ratings, target price, earnings forecasts, and related views cited in the piece are those of the broker’s analysts and represent the position of their institution, not the view of Chaoxiang Research, and do not constitute investment advice.
Markets carry risk, and decisions should be made independently. This article should not be used as a basis for buying or selling any security.