11:25 AM EST, 12/12/2024 (MT Newswires) -- Constellation Energy ( CEG ) is undervalued amid "changing dynamics" in the power market and has strong growth potential due to factors such as increasing power prices, BofA Securities said Thursday.

"We believe CEG offers a unique investment opportunity, with sustained double-digit growth, an asset mix and business model that provides clean, baseload generation, and a compelling valuation relative to peers," BofA analyst Ross Fowler said in a note to clients.

The company is best placed to benefit from growing demand and tightening supply, but the potential is not reflected in its share price at present, according to the note.

Constellation Energy's ( CEG ) revenue is mainly energy based, and prices are likely to continue to increase, potentially pushing its revenue higher over time, BofA said. "We believe CEG is well-hedged even if power prices were to decline, through its tax credits, which we believe are likely to remain in place due to bipartisan support."

BofA updated its 2024, 2025 and 2026 per-share earnings projections for the company to $8.24, $9.20 and $11.33, respectively. The investment firm previously expected $8.20, $8.99 and $10.86, respectively.

BofA also upgraded its rating on the stock to buy from neutral and raised its price objective to $269 from $237.

The company's shares were up 3.5% in recent trading.

Price: 244.87, Change: +8.27, Percent Change: +3.50