For Immediate Release
Chicago, IL – January 21, 2025 – Zacks Equity Research shares Constellation Energy CEG, as the Bull of the Day and J.B. Hunt Transport Services JBHT, as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Motors GM, Lithium Americas LAC and Tesla’s TSLA.
Here is a synopsis of all five stocks:
Bull of the Day:
Constellation Energy is a Zack Rank #1 (Strong Buy) that is a leading energy provider in the United States, specializing in electricity generation. The company delivers electric power, natural gas, and energy management services to over 2 million customers nationwide.
With the stock up over 41% already this year, CEG is looking to be a big winner in 2025. It is the largest gainer in the S&P 500 so far in January, but investors are looking for more as nuclear energy becomes a focus to fuel artificial intelligence demand.
About the Company
Headquartered in Baltimore, Maryland, Constellation operates through five segments—Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions. Constellation boasts approximately 33,094 megawatts (MW) of generating capacity. This capacity spans a mix of nuclear, wind, solar, natural gas, and hydroelectric assets. Its customer base includes distribution utilities, municipalities, cooperatives, and residential, commercial, industrial, and governmental entities.
As the lowest carbon emitter among major U.S. investor-owned generators, Constellation Energy is committed to eliminating 100% of its greenhouse gas emissions. It leverages cutting-edge technology and a diverse energy portfolio, including the nation’s largest carbon-free nuclear fleet, to generate 60% of America's clean, zero-carbon energy.
The stock has a Zacks Style Score of “A” in Momentum, but “D” in Growth and “F” in Value.
Nuclear Gains Steam
Constellation Energy operates the largest fleet of nuclear plants in the United States, consisting of 21 reactors across 12 sites in the Midwest, Mid-Atlantic, and Northeast regions. These reactors collectively produce clean, zero-carbon, and reliable energy, significantly contributing to the nation's electricity supply.
In 2021, Constellation achieved a nuclear capacity factor of 94.5%, the highest in the industry. During the summer months of 2024, the reactors operated at a 98.1% capacity factor, showcasing exceptional reliability during periods of high electricity demand.
In early January Constellation secured contracts worth $1 billion to supply nuclear power to the U.S. government over the next decade. This agreement represents a significant milestone for the company and nuclear energy as it marked the largest federal procurement of nuclear energy to date.
With the rise of energy demands driven by advancements in Artificial Intelligence, nuclear energy stands out as a key solution to meet the nation's needs. Technologies like Small Modular Reactors (SMRs) and advanced reactors such as Pressurized Water Reactors (PWRs) and Fast Breeder Reactors (FBRs) offer scalable, reliable, and carbon-free power, making nuclear an essential component in supporting the growing energy landscape.
Calpine Deal
On January 10th, Constellation Energy announced the acquisition of Calpine Corporation in a deal valued at approximately $26.6 billion, including $4.5 billion in cash, 50 million shares of Constellation stock, and the assumption of $12.7 billion in Calpine's debt.
The acquisition will combine Constellation's nuclear expertise with Calpine's low-emission natural gas and geothermal plants, creating the nation's largest clean energy provider with over 27,000 megawatts of generation capacity.
Constellation anticipates generating over $2 billion in annual free cash flow from the deal. Following the announcement, Constellation's shares rose by 15%, with analysts raising price targets, citing strong growth prospects from the acquisition.
Q3 Earnings Beat
Constellation delivered strong Q3 earnings, reporting an EPS of $2.74, which surpassed analyst estimates of $2.64 and represented a 28.64% increase from the previous year's $2.13 EPS. Quarterly sales reached $6.550 billion, exceeding the consensus estimate of $5.714 billion, marking a 7.18% year-over-year increase. The company's generation fleet performed notably well, and Constellation raised its FY24 adjusted operating EPS guidance to $8.00 – $8.40, although slightly below the analyst estimate of $8.43.
Constellation Energy Corporation price-eps-surprise | Constellation Energy Corporation Quote
Constellation's shares traded lower due to a combination of the market wanting more and concerns over regulatory challenges. However, the stock did rally before the Calpine deal, which eventually took shares to new heights.
Estimates Headed Higher
During the Q3earnings call Constellation highlighted significant milestones, including a 20-year power purchase agreement with Microsoft to restart the Crane Clean Energy Center and Three Mile Island Unit 1, emphasizing its commitment to clean, reliable energy.
Analysts see a bright future ahead, with many taking their earnings estimates significantly above the pre-earnings levels.
For the current quarter, estimates have gone from $1.31 to $2.20 over the last 90 days. This is a jump of 67%.
For the current year, estimates have gone from $8.01 to $8.43, or 5.2% over the same time frame.
And for next year, the trend continues. Over the last 90 days, estimates have gone from $8.99 to $9.37 or 4.2%.
The Technical Take
The stock is trading at all-time highs after the Calpine deal. With earnings in late February, investors likely continue the momentum higher. There are Fibonacci extension targets at $330 and $395, but let us look at some levels to buy on any pullback.
21-day Moving Average: $255
50-day MA: $248
200-day: $222
While most investors do not want to chase, this stock might not give an opportunity to buy. This stock has tremendous momentum and could continue higher into EPS.
In Summary
Constellation Energy stands poised for a remarkable 2025, buoyed by its stellar Q3 performance and strategic initiatives.
The acquisition of Calpine Corporation further solidifies Constellation’s position as a clean energy powerhouse, combining nuclear expertise with low-emission natural gas and geothermal assets. This strategic move is expected to generate significant free cash flow, enhancing shareholder value, and driving the company’s growth trajectory.
Investors looking for a strong, sustainable growth story should find Constellation Energy an attractive proposition. Its blend of operational excellence, strategic acquisitions, and a clear commitment to environmental stewardship sets the stage for continued success.
Bear of the Day:
J.B. Hunt Transport Services holds a Zacks Rank #5 (Strong Sell) and is a transportation and logistics company offering a diverse array of services designed to assist businesses with their shipping and supply chain requirements.
The company reported another earnings miss, maintaining a trend that has kept the stock under pressure in recent years.
With earnings estimates head lower, is it time for investors to look for a different player in the sector?
About the Company
J.B. Hunt Transport Services, Inc. provides a range of surface transportation, delivery, and logistics services across the U.S. through five segments: Intermodal, Dedicated Contract Services, Integrated Capacity Solutions, Final Mile Services, and Truckload.
The company offers freight solutions using a fleet of owned and managed equipment, including tractors, trailers, and independent contractor trucks. It serves a wide array of industries with transportation options such as dry-van, refrigerated, expedited, and flatbed freight, and operates a multimodal logistics marketplace.
Founded in 1961, J.B. Hunt is headquartered in Lowell, Arkansas. JBHT is valued at $17 billion and has a Forward PE of 25. The stock holds Zacks Style Scores of “D” in Value, But “A” in Growth.
Q3 Earnings
J.B. Hunt reported disappointing Q4 earnings, missing EPS by a 5.5%. While earnings were up 4.0% over last year's EPS of $1.47, it reflects a troubling trend of underperformance when compared to analyst projections. The revenue of $3.15 billion, though in line with estimates, represents a 4.77% decrease year-over-year, signaling potential challenges in maintaining top-line growth amid a shifting logistics landscape.
J.B. Hunt has missed earnings expectations eight out of the last nine quarters, raising concerns about the company's ability to navigate the current macroeconomic environment. Investors reacted negatively, with shares dipping over 10% following the report.
Looking at the broader picture, J.B. Hunt’s $157.65 million revenue decline highlights the pressure it’s facing, with weaker earnings suggesting that tightening economic conditions could continue to impact profitability and growth.
Earnings Estimates
Estimates have seen significant cuts across all time frames since the earnings report last week
For the current quarter, forecasts have dropped 7% over the past 7 days, from $1.46 to $1.36.
Looking to next quarter, estimates have declined 5% in that same period, down from $1.70 to $1.61.
For the full year, projections have been adjusted downward by 3%, now at $7.01 from $7.25.
J.B. Hunt Transport Services, Inc. price-consensus-chart | J.B. Hunt Transport Services, Inc. Quote
Next year’s outlook follows a trend of revision downward over the last 90 days. Estimates have fallen 3% over that time frame, down to $8.52 from $8.76.
While many analysts are maintaining their bullish ratings, they have lowered their price targets:
Benchmark: Reiterates Buy, maintains price target of $195.
JP Morgan: Maintains Overweight, lowers price target to $200 (from $205).
Wells Fargo: Maintains Overweight, lowers price target to $190 (from $200).
BofA Securities: Maintains Buy, lowers price target to $189.
Technical Take
The recent down move is threatening to break some technical support, with the 200-day holding barely holding after earnings. If that $172 level were to break, the 2024 lows at $155 could be in play.
If the bulls can fill the earnings gap, it would be a positive signal, but until then the bears have control. Look for a move down to $160 if the 200-day MA is broken.
In Summary
J.B. Hunt continues to face significant headwinds, with persistent earnings misses, declining revenue, and downward earnings estimate revisions indicating a tough road ahead.
Despite analysts maintaining bullish ratings, their lowered price targets reflect growing caution, and the stock’s technical support is under increasing pressure.
Until the company shows signs of turning things around, the bearish sentiment is likely to persist.
Additional content:
GM's EV Supply Chain Strengthens: Is the Stock a Value Play Now?
U.S. legacy automaker General Motors has been making significant strides in strengthening its supply chain to support electric vehicle (EV) production. A couple of days back, it inked a deal with a Norway-based synthetic graphite manufacturer, Vianode, to boost its battery supply chain.
General Motors’ efforts to secure raw materials, form strategic alliances and bolster manufacturing capabilities are part of a broader strategy to lead the transition to sustainable transportation. But does this make GM’s stock a compelling buy right now? Let’s dive in.
GM’s Strategic Alliances to Rev Up EV Game
In an era where supply chain disruptions can derail production plans, the U.S. auto giant is doubling down on building resilience. The COVID-19 pandemic has taught the importance of strong and diverse supplier relationships, and GM seems to have embraced these lessons. By prioritizing long-term partnerships, nearshoring efforts and direct collaborations with suppliers, the automaker has positioned itself to navigate market complexities with greater ease.
A recent example is GM’s multi-billion-dollar deal with Vianode, which ensures a steady supply of anode materials for GM’s battery cells, produced in collaboration with LG Energy Solution. Slated to begin in 2027, the deal emphasizes GM’s commitment to a localized and sustainable battery supply chain in North America, aligning with its long-term electrification goals.
GM’s joint venture with Lithium Americas to develop the Thacker Pass lithium project underscores the automaker’s focus on securing critical raw materials. With one of the largest lithium reserves in the United States, this venture (closed last month) represents a strategic investment to meet growing EV demand. With GM’s $625 million investment, it has gained a 38% stake in the project.
Multi-year agreements with LG Chemical, POSCO Chemical and Livent ensure a steady supply of lithium, nickel, cobalt, and cathode active materials — all crucial for battery production. The automaker’s long-standing collaboration with LG Energy Solution has evolved to include prismatic cell technology, enhancing battery performance and diversity. Their JV has established significant battery manufacturing capacity in Ohio and Tennessee.
GM has also expanded charging access for its customers by integrating Tesla’s Supercharger network to deploy fast-charging stations across metropolitan areas. These initiatives enhance the EV ownership experience and support the company’s vision of an all-electric future.
GM’s Dominance in the U.S. Market
It is the top-selling automaker in the United States, with a compelling portfolio and a strong demand for its quality pickups and SUVs. GM sold 2.7 million vehicles in 2024, a 4.3% increase year over year, with all four key brands — Chevrolet, GMC, Buick, and Cadillac — posting solid gains.
With regard to EV sales, GM secured the second spot in U.S. BEV sales in 2024, just behind Tesla, which continues to dominate with a 50% market share. General Motors’ EV sales totaled 114,000 in 2024, representing a 50% increase from 2023. The company’s diverse lineup, including the Chevy Equinox EV, Cadillac Lyriq and GMC Hummer EV, positioned it as the second-largest EV seller in the country.
Beyond EVs: GM’s Cost Discipline and Financial Strength
General Motors’ focus on cost management and financial resilience also augurs well. The company’s $2 billion cost-reduction program is expected to have been completed by 2024 end.
GM’s balance sheet further underscores its strength. With $40.2 billion in total automotive liquidity as of Sept. 30, 2024—including $23.7 billion in cash—the company is well-equipped to weather macroeconomic challenges.
Investor-friendly initiatives add another layer of appeal. GM’s share buyback program, which included $1 billion in repurchases last quarter, reflects management’s confidence. Its plans to retire an additional 25 million shares by year-end further demonstrate its commitment to enhancing shareholder value.
Stock Performance & Valuation
GM’s stock has surged 50% over the past year, outperforming its peer group and the broader market.
The stock is trading above its 200-day moving average, indicating bullishness.
From a valuation standpoint, GM fares well. Trading at a forward price-to-earnings ratio of just 4.82, well below its peer group, GM offers significant upside potential for value investors.The stock has a Value Score of A.
GM: A Strong Buy
General Motors’ robust U.S. market presence, cost management and a clear commitment to electrification position it for sustained success. The company’s efforts to fortify its supply chain and expand its EV portfolio bode well. The Zacks Consensus Estimate for GM’s 2025 EPS implies year-over-year growth of 4%. The estimate has been revised upward by 14 cents in the past 60 days, signaling optimism.
All in all, GM stock offers a blend of value, growth potential and resilience. As the automaker continues to rev up its EV game, now might be an opportune time to take the wheel and consider adding GM to your portfolio.
GM stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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7 Best Stocks for the Next 30 Days
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See them now >>Constellation Energy Corporation (CEG) : Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Lithium Americas Corp. (LAC) : Free Stock Analysis Report
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