Constellation Energy Corp (NASDAQ: CEG) fell 3% on Wednesday after analysts estimated it won’t receive a high premium for its electricity from its deal with Meta Platforms Inc (NASDAQ: META).

Meta has agreed to buy about 1.1 gigawatt of energy from CEG’s nuclear power plant in Illinois. The recently signed contract is for 20 years and is set to begin in 2027.

Still, Citi analysts led by Ryan Levine downgraded CEG shares to “neutral” on Wednesday. Note that the nuclear energy stock is already up some 80% versus its year-to-date low.

Why is Citi dovish on Constellation Energy stock?

Levine dubbed Constellation Energy stock a “high risk” investment in his research note today, adding the Meta deal has a mixed message at best for the company’s investors.

According to the Citi analyst, the estimated price per megawatt-hour of nuclear energy in the deal that CEG has signed with the tech behemoth ranges from $75 to $90 per megawatt-hour.

The said rate is “not a big enough premium for low carbon power” and is comparable to prices offered by new natural gas plants, he argued in a research note today.

The investment firm announced a $318 price target on CEG shares, which signals potential upside of less than 2% from the previous day’s close.

CEG may not receive the expected premium

Levine is concerned that Meta’s pricing could become the standard for future contracts with other tech companies, many of whom are getting interested in nuclear power as a reliable, zero-emission source of energy for their AI data centres.

“This deal has broad implications on the power markets,” the Citi analyst told clients in his report, adding investors’ expectations that tech firms will pay a high premium for nuclear power are being challenged here.  

Ryan Levine’s research note arrives about a month after CEG reported a better-than-expected 10% year-over-year increase in its revenue to $6.79 billion in the first quarter.

However, the Nasdaq-listed firm came in short of EPS estimates in its fiscal Q1. Constellation Energy stock currently pays a dividend yield of 0.51%.

Is it worth buying CEG shares for the back half of 2025?

In short, Constellation’s nuclear infrastructure is seen as a strategic asset in the race to electrify as well as decarbonize data centres, Analysts believe the Meta deal lacked the “wow factor” this week.

Don Bilson of Gordon Haskett, for example, noted the agreement, while supportive of extending the life of an important CEG nuclear facility, “will not provide Constellation Energy stock with above-market windfall.”

In fact, competitors like NRG Energy, Vistra, and Talen Energy saw even stronger stock gains on Tuesday.

Constellation Energy in fact failed to hold on to its gains as it opened at $342 on Tuesday only to close at $313.03.

Investors may now view these independent power producers as more agile or better positioned to capture future clean energy contracts at attractive terms.

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