Talen Energy soared Friday after announcing a $3.5 billion deal for two combined-cycle gas-fired plants. Talen looks to expand its portfolio to better support data center energy needs. S&P 500 nuclear giants Constellation Energy and Vistra also rallied.
Houston-based Talen Energy reported Thursday that it has signed definitive agreements to acquire Caithness Energy's Moxie Freedom Energy Center in Pennsylvania. And to also acquire the Caithness Energy-BlackRock joint-operated Guernsey Power Station in Ohio, for a combined price of $3.5 billion.
Talen is targeting Q4 2025 to close the deals and expects to issue approximately $3.8 billion in new debt to fund the acquisitions.
In Thursday's announcement, the company stated that the acquisitions enhance their "platform for data center and large-load contracting."
"The addition of the facilities to Talen's portfolio enhances Talen's ability to offer reliable, scalable, grid-supported and regionally diverse low-carbon capacity to hyperscale data centers and large commercial off-takers," Talen Energy noted Thursday.
S&P 500 Stocks And Talen Take Off
Talen Energy stock soared 23% to 324.94 during Friday's stock market action, vaulting from the 50-day line to a new high.
S&P 500 stock Constellation Energy jumped 5% to 232.37 on the Talen deal. Fellow S&P 500 power provider Vistra advanced 6.2% to 193.43 during Friday's stock market.
Constellation Energy stock has a 342 point buy point from a flat base near the top of a deep consolidation. A move above 328.44 could offer an early entry. Vistra stock has a 200.25 high-handle entry on a deep, six-month consolidation.
Analysts Hail Talen Power Deal
UBS analyst William Appicelli raised his TLN price target following the deals to 399, up from 366.
"We view this development favorably and see this as Talen "extending the runway" of assets that they can leverage amidst the power demand boom within PJM and comes on the heels of the AWS (Amazon Web Services)' deal announced last month," Appicelli wrote.
Meanwhile, Evercore analysts also raised their TLN price target to 372 from 306 on Friday. Jefferies hiked its Talen Energy target price to 380 from 326 and Morgan Stanley increased its view to 330 from 300.
The Talen Energy deal to expand its gas powered power plant offerings comes as several Pennsylvania natural-gas deals with AI data centers have been announced in recent days. Meanwhile, President Donald Trump on Tuesday visited the Pennsylvania Energy and Innovation Summit, at Carnegie Mellon University in Pittsburgh, to showcase a $92 billion commitment to support AI and energy initiatives.
Trump was joined Tuesday in Pittsburgh by tech and energy industry leaders. The announcement included tens of billions of dollars in AI and energy investment, including Alphabet's $25 billion investment in data centers and infrastructure as well as another $25 billion from Blackstone for data centers and natural gas plants.
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Talen Energy stock has a 44 Composite Rating out of a best-possible 99. The stock also has a 42 Relative Strength Rating and a 49 EPS Rating.
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