Constellation Energy Corp (NASDAQ:CEG) shares are trading higher Monday. Multiple analyst firms raised price targets on the stock following the company's deal with Microsoft Corp (NASDAQ:MSFT) announced late last week.

What Happened: On Friday, Constellation Energy shares jumped more than 22% after the company signed a 20-year power purchase agreement with Microsoft that will restart Three Mile Island and pave the way for the launch of the Crane Clean Energy Center.

Following the announcement, Morgan Stanley analyst David Arcaro maintained Constellation Energy with an Overweight and raised the price target from $233 to $313. Keybanc analyst Sangita Jain maintained an Overweight rating and raised the price target from $230 to $265. Shares appear to be getting a boost on Monday from the price target increases.

Under terms of the agreement, Microsoft will purchase energy from the renewed Three Mile Island Unit 1 as it works towards providing carbon-free energy for its data centers. The company noted that Three Mile Island Unit 1 is a fully independent facility, and its long-term operation was not impacted by the Unit 2 accident that caused the facility to be shut down in 1979.

As the companies prepare for the restart, significant investments will be made to restore the plant. Constellation also said it plans to pursue license renewal that will extend plant operations to at least 2054. Constellation's Crane Clean Energy Center is expected to come online in 2028.

"Before it was prematurely shuttered due to poor economics, this plant was among the safest and most reliable nuclear plants on the grid, and we look forward to bringing it back with a new name and a renewed mission to serve as an economic engine for Pennsylvania," said Joe Dominguez, president and CEO of Constellation Energy.

CEG Price Action: Constellation Energy shares were up 1.97% at $260 at the time of publication, according to Benzinga Pro.

Photo: Shutterstock.