We recently published a list of the Top 15 Energy Companies with the Highest Upside Potential. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against other top energy companies.
After posting notable gains in the first three months of 2025, the energy sector witnessed significant declines in April, primarily due to the ongoing global trade war sparked by President Trump’s tariffs and the prospects of an economic slowdown. The overall energy sector has now slid by around 3.8% since the beginning of the year, against a decline of about 5.8% by the wider market. Unsurprisingly, the downturn is led by the oil and gas sector, which has fallen by over 15% YTD.
The primary reason behind this fall is the declining global price of crude oil, caused by the continued uncertainty surrounding global trade, demand fears, and the recent decision by OPEC+ to increase supply. The West Texas Intermediate crude price is currently hovering at a multi-year low level of just under $62, down by over 25% YoY. To make matters worse, the International Energy Agency recently cut its 2025 oil demand growth forecast by 300,000 barrels per day compared to last month, warning the world to ‘buckle up’ amid the escalating trade tensions.
That said, there are sectors in the energy industry that are still significantly bullish, with liquified natural gas being a prime example. The United States of America is already the largest LNG exporter in the world, with exports growing consistently over the last decade. Still, the industry continues to boom after it received significant support from the Trump administration, which has made boosting America’s fossil fuel sector its primary agenda. According to Wood Mackenzie, 15.5 million tons per annum (MTPA) of long-term LNG offtake contracts were signed in the first quarter of 2025, following a record 81 MTPA last year. These numbers are expected to spike in the coming months after more and more countries are looking to export American LNG to narrow their trade gap with the US, following a tariff threat by the White House.
Another important growth driver for the energy sector is the ongoing AI boom and its accompanying power-hungry data centers. According to a study by the American Clean Power Association, electricity demand in the US is expected to surge by 35-50% by 2040, driven by domestic manufacturing growth, data centers, and mass electrification. A primary candidate to satisfy this huge demand is natural gas, which is clean, reliable, and abundant. According to energy data provider Enverus, a total of 80 new gas power plants could be constructed in America by the end of the decade. That said, natural gas is not as cheap as it was a year ago, as prices have surged by around 36.6% over the last 52 weeks.
Another important candidate is nuclear energy, which has emerged as a hot topic these days, especially after several tech giants met on the sidelines of the CERAWeek conference in Houston and signed a pledge to support the goal of at least tripling the world’s nuclear energy capacity by 2050. A number of these companies have already signed contracts with nuclear energy providers to power their data centers, with Jeff Bezos’ online retail giant being a primary example.
Constellation Energy Corporation (CEG): Among the Top Energy Companies with the Highest Upside Potential
A close up of a wind turbine producing electricity as the sun sets.
To collect data for this article, we examined companies operating in the energy sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of April 28, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Energy Companies with the Highest Upside Potential.
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Upside Potential as of April 28: 28.8%
Constellation Energy Corporation (NASDAQ:CEG) is the largest producer of carbon-free energy in the US with approximately 34.2 GW of generating capacity, enough to power 16 million homes and businesses.
Constellation Energy Corporation (NASDAQ:CEG) reported better-than-expected results in Q4 2024. Its adjusted EPS of $2.44 topped expectations by $0.3, benefiting from lower expenses and rising demand for power. The company’s revenue of $5.38 billion also beat estimates by $633.73 million, despite being down by 7.14% YoY. Moreover, Constellation Energy’s operating margins have increased from 10% to the high teens, with an impressive ROE of 30%, significantly outperforming traditional utilities that struggle to exceed 10% ROE. The company also repurchased $1 billion of its common stock in FY 2024, in addition to increasing its annual dividend by 25%.
In a significant move to expand its portfolio, Constellation Energy Corporation (NASDAQ:CEG) announced in January that it has agreed to acquire the natural gas and geothermal company Calpine Corp for $26.6 billion, marking one of the biggest acquisitions in the US power industry. CEG’s upside potential was also highlighted by Citigroup earlier this month, when they upgraded their outlook for the company from Neutral to Buy with a price target of $232.
Overall, CEG ranks 15th on our list of the top energy companies with the highest upside potential. While we acknowledge the potential of CEG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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