NRG Energy, the Utilities sector company, was revisited by a Wall Street analyst yesterday. Analyst Ryan Levine from Citi reiterated a Buy rating on the stock and has a $180.00 price target.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Ryan Levine has given his Buy rating due to a combination of factors that highlight NRG Energy’s potential for growth and value creation. The analyst has updated the valuation model to reflect recent deals and the current market outlook, projecting an EBITDA of $896 million for the second quarter. A significant driver of this positive outlook is the anticipated value from NRG’s 1.2GW hyperscaler deals, which are expected to contribute approximately $16 per share. These deals involve long-term contracts at favorable pricing, offering a substantial upside compared to current market forwards.
Additionally, Levine sees potential value from the sale of interconnection capacity to smaller datacenters, estimated to add around $4 per share. This potential is based on a strategic advantage in time-to-market and favorable margins. The analyst’s refreshed sum-of-the-parts analysis incorporates these elements, alongside recent acquisitions and the expected contribution from gas plants under due diligence. Levine believes the market is undervaluing these opportunities, supporting the Buy rating with a raised price target of $180.
Based on the recent corporate insider activity of 101 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NRG in relation to earlier this year.