Bank of Nova Scotia has initiated coverage on US independent power producers including Constellation Energy Corp (CEG.US), NRG Energy (NRG.US), and Vistra Energy (VST.US), assigning "outperform" ratings with target prices of $401, $212, and $256 respectively. The bank cited "robust power demand prospects, combined with downside protection and strong balance sheets" as key factors supporting these ratings.

Following this development, US stocks closed higher on Monday with Constellation Energy Corp gaining 4.90%, NRG Energy rising 4.02%, and Vistra Energy advancing 3.14%.

Bank of Nova Scotia analyst Andrew Weisel identified Constellation Energy Corp as his top pick in the sector, highlighting the company's leadership position across multiple industry metrics. He emphasized the firm's premier fleet composition and strong track record in innovation and execution, particularly in data center contracts and organic growth initiatives. The analyst described Constellation Energy Corp as "a utility-like independent power producer in the best sense of the term."

Weisel believes the company combines the stability of utilities with the growth potential of independent power producers, noting that the industry is experiencing unprecedented demand peaks, positioning the company for robust growth prospects.

Andrew Weisel designated NRG Energy as his "value pick," acknowledging that while NRG Energy "does not possess the highest quality assets or business portfolio," the company continues to demonstrate impressive execution capabilities.

He also views Vistra Energy as "a straightforward, high-quality independent power producer with a solid and highly diversified growth story, along with an attractive asset portfolio across various competitive markets that can benefit from strong industry fundamentals."

Additionally, Andrew Weisel initiated coverage on Talen Energy (TLN.US) with a "market perform" rating and a target price of $418.