Goldman Sachs: Constellation Energy signs 3.6GW nuclear PPA with Google, contract rate rises to 28%

According to Chaoxiang Research, a Goldman Sachs research note dated October 6, 2026, highlights that Constellation Energy has entered into power purchase agreements with Google totaling approximately 3.6GW of nuclear capacity. The agreement encompasses 890MW of nuclear capacity upgrades over a 20-year term, plus 2,700MW of existing nuclear capacity over a 15-year term, amounting to roughly 3.59GW. Constellation Energy has committed to investing over $4.3 billion. With the deal, the proportion of the company's contracted nuclear capacity jumps from 13% to 28%. Goldman Sachs calculates that pre-growth free cash flow is expected to increase by approximately $449 million to $1.167 billion, representing 5% to 14% of its projected 2030 levels.

Goldman Sachs maintains a Neutral rating with a target price of $305, while the current share price stands at $267.62. The firm considers the agreement constructive for both the company and the sector, potentially alleviating investor concerns over whether PJM will successfully sign PPAs. Goldman Sachs also points out that Constellation Energy's valuation attractiveness remains modest compared to other independent power producers. The sustainability of this re-rating will depend on whether PJM policy generates unfavorable results, including the IRAS ruling expected by October 12 and the pending RBP process.