| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 42 | — | 17.8x | Around median | |
Growth | 75 | 100.1% | 7.1% | Top tier | |
Quality | 36 | 0.3% | 4.5% | Bottom tier | |
Safety | 25 | 22.0x | 2.6x | Bottom tier | |
Capital Return | 21 | — | 2.12% | Bottom tier | |
Momentum | 35 | -8.0% | 2.9% | Bottom tier | |
Sentiment | 39 | 6 | 3 | Bottom tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Talen Energy Corporation is a power generation company focused on operating a fleet of plants within the PJM market and selling energy and capacity, while building contracted cash flows through long-term power purchase agreements. The company benefits from its existing generation plants, including Susquehanna, Montour, Martins Creek, Freedom, and Guernsey, and from higher utilization of mid-merit and peaking assets; in Q1 FY2026, the fleet generated approximately 16 terawatt-hours and recorded an overall capacity factor of 55%. The Talen Flywheel strategy also seeks to increase cash flow per share through acquisitions, share repurchases, and data center contracting.
In Q2 FY2026, revenue was $747 million, and the company recorded a net loss of $92 million and negative earnings per share of $2. This compares with revenue of $1.1 billion, net income of $63 million, and earnings per share of $1.33 in Q1 FY2026, revealing a clear sequential decline in revenue and profitability. On a trailing twelve-month basis in FY2026, revenue was $3.4 billion and the net loss was $21 million.
The company’s economic mix relies on combining exposure to PJM energy and capacity prices with long-term contracted cash flows. According to the May 5, 2026 presentation, contracted cash flows with an AA-rated counterparty are expected to represent approximately 35% of long-term gross margin upon completion of the ramp-up of the existing approximately 2-gigawatt power purchase agreement and the inclusion of the Cornerstone assets, while each additional 1-gigawatt agreement could increase the percentage by approximately 15 percentage points. This makes growth in data center contracts an important pillar for reducing relative dependence on PJM market volatility.
The average analyst price target is $466.8, slightly above the top of the 52-week range of $451.28, while the target range extends from $405 to $560 compared with an annual share price range of $294.77 to $451.28. The “Buy” consensus supports the positive outlook, but the wide target range reflects meaningful differences in estimates of the value of data center growth and future cash flows versus accounting losses and the volatility of PJM market exposure.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Operating growth in Q1 FY2026 came from Freedom and Guernsey, higher energy prices and margins, increased capacity revenue, and the AWS agreement ramp-up. Adjusted earnings before interest, taxes, depreciation, and amortization were $473 million, and adjusted free cash flow was $350 million. On August 7, 2026, the company raised its FY2026 financial guidance and improved its cash flow outlook through FY2028, with a focus on grid-connected data centers.
Talen is working with land totaling up to 3,000 acres that can support between 3 and 4 gigawatts of data center capacity at current compute density. The portfolio includes several opportunities for power purchase agreements exceeding 1 gigawatt, with the potential to add 500 megawatts to 1 gigawatt of new generation at several sites. The company also submitted more than 2 gigawatts of gas and storage projects to PJM’s first interconnection study group to implement a model that combines power from existing plants with new generation at a later stage.
Talen recorded revenue of $747 million, a net loss of $92 million, and negative earnings per share of $2 in Q2 FY2026. Q1 FY2026 results were stronger on an accounting basis, with revenue of $1.1 billion, net income of $63 million, and earnings per share of $1.33. The picture therefore combines the improved guidance announced on August 7, 2026 with a clear sequential decline in reported revenue and profitability.
Automated analysis for informational purposes only — not investment advice.
The FY2026 guidance provided on May 5, 2026 did not include any contribution from the Cornerstone assets, while the preliminary outlook for FY2027 and FY2028 included those assets. The company financed the transaction through $4 billion of unsecured notes spread across five- and seven-year maturities at a blended interest rate slightly above 6.25%. It also replaced $1.2 billion of secured notes carrying an 8.58% coupon, saving more than $40 million annually in interest expense according to management estimates.
The most prominent financial risks are the shift in net income from $63 million in Q1 FY2026 to a loss of $92 million in Q2 FY2026, with revenue declining from $1.1 billion to $747 million. A large portion of gross margin remains exposed to the PJM market because the expected contracted share is only 35% upon completion of the existing agreement ramp-up and the inclusion of Cornerstone. New generation also requires long-term power purchase agreements or support from PJM’s backstop mechanism, alongside risks related to interconnection rules and the accumulation of interconnection queue requests.
On May 5, 2026, management projected free cash flow of approximately $34 per share in FY2027 and approximately $36 in FY2028 assuming a constant share count. Assuming that 70% of free cash flow is allocated to share repurchases, the FY2028 estimate rises to approximately $41 per share and equates to an estimated free cash flow yield of approximately 11%. This assumption also leaves approximately $1 billion of additional liquidity across FY2027 and FY2028, according to management’s presentation.
