Constellation Energy falls after Citigroup downgrade

Constellation Energy's CEG.O shares down 2.7% at $304.50 on Weds after Citigroup cuts rating to 'neutral' amid refreshed valuation

Brokerage's downgrade came after Constellation on Tues forged 20-yr nuclear power deal with Meta Platforms META.O

Citigroup noted that on Apr 9 with the stock around $185 it upgraded CEG to 'buy' as there was little potential datacenter deals priced in

Given the stock's rally and Meta deal, Citigroup said it took a closer look at valuation, and raised PT to $318 from $232

Citigroup says new PT assumes a sum-of-the-parts that all CEG existing nuclear plants with license expiring before 2045 (70% of ~22 gigawatt fleet) could sign a datacenter deal at $80/megawatt hour

In addition, analysis assumes existing power plants are worth 1x higher EV/EBITDA multiple on increased scarcity value, Citigroup said

Now, of 17 brokerages covering CEG, recommendation breakdown is 12 "strong buy" or "buy" and 5 "hold" ratings, according to latest LSEG data

Median PT of $337 up from $291 a month ago

With move on the session, shares up 36% YTD vs 7.5% gain in S&P 500 Utilities .SPLRCU and 1.7% advance for S&P 500 .SPX