CEG Stock Takes A Hit After Citi's Price-Target Cut — But Retail Is Already Diving In To Buy The Dip

Citi lowered the price target on CEG to $297 from $348 and maintained a ‘Neutral’ rating on the shares.

• The firm said that it had updated the company's model post the PJM meeting. 
• PJM, which serves 67 million people across 13 states, warned of potential electricity reliability risks from surging demand and extreme temperatures.
• Constellation Energy is one of the largest power producers in the region.

Shares of Constellation Energy Corp. (CEG) slumped nearly 5% on Wednesday, the steepest drop in a month, after Citi slashed the price target on the energy company by nearly 15%.

Citi lowered the price target on CEG to $297 from $348 and maintained a ‘Neutral’ rating on the shares, implying about 25% upside. The firm said that it had updated the company's model post the PJM meeting.

CEG stock also fell to an annual low of $228.63 following the revision of the downward target.

What Caused The CEG Target Cut?

PJM, which serves 67 million people across 13 states, warned of potential electricity reliability risks from surging demand and extreme temperatures. PJM urged the U.S. Energy Secretary to declare an emergency, warning that an “imminent electric reliability emergency” could threaten grid stability and power supply across its region amid an expected heatwave.

The grid operator said that it expects peak electricity demand to reach about 159,563 MW on July 1 and 162,860 MW on July 2. PJM cautioned that certain power plants could face operational constraints due to environmental permits and said the “forecasted demand raises a significant risk of emergency conditions that could jeopardize electric reliability and public safety.”

Constellation Energy garnered attention amid this statement from PJM as it is one of the largest power producers in the region.

The Trump administration subsequently declared a power emergency for the PJM Interconnection grid on June 30, allowing power plants across the region to operate at full capacity and bypass certain environmental restrictions.

Retail Turns Bullish On CEG Stock Slump

On Stocktwits, retail sentiment jumped from ‘bearish’ to ‘bullish’ territory over 24 hours amid ‘high’ message volumes.

One user said, “$CEG is now the absolute best play in the market at this #.”

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Another user said they “bought the dip.”

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A third user said the stock was a “steal at these prices.”

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CEG stock is down about 35% so far this year.

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