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Clearway Energy, Inc. (CWEN.A)
NYSE:CWEN.A
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Clearway Energy
(NYSE:CWEN.A)
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Rating:69Neutral
Price Target:
$44.00
▲(29.95% Upside)
Action:DowngradedDate:02/24/26
The score is supported by strong technical momentum and a constructive earnings-call outlook (reiterated guidance, long-term CAFD per-share targets, and pipeline execution), plus attractive income characteristics (high dividend yield with a mid-teens P/E). The primary offset is financial risk from a debt-heavy capital structure and some variability in earnings/cash conversion.
Positive Factors
Long-term contracted revenue via PPAs
Material PPA contracting with hyperscalers creates predictable, multi-year cash flows that materially reduce merchant exposure. This contractual base underpins CAFD guidance, supports project financing and de-risks near-to-medium-term revenue needed to fund growth and distributions.
Large development pipeline & repowering program
A deep, commercialized pipeline and targeted repowerings extend asset life, raise yields and provide a multi-year project backlog. This gives redundancy to hit 2030 CAFD goals, enables staged capital deployment, and improves long-term returns versus relying solely on merchant markets.
Proven capital-markets access & sponsor support
Demonstrated ability to raise both debt and equity on favorable terms, plus sponsor-enabled dropdown opportunities, preserves funding optionality. This reduces execution risk for growth, supports refinancing plans and underpins management's ability to pursue accretive projects while targeting a stable credit profile.
Negative Factors
High leverage and elevated debt load
A large absolute debt burden raises refinancing and interest-rate sensitivity, limiting financial flexibility. Elevated leverage constrains the ability to absorb project delays or resource shortfalls, pressures credit metrics and could force more dilutive or costly funding during adverse market windows.
Cash conversion weakness & FCF softness
Weaker cash conversion and lower free cash flow reduce the cushion for servicing debt, funding repowerings and sustaining distributions without external capital. Persistent timing or working-capital effects can force additional debt/equity raises, slowing organic payout recovery and increasing funding costs.
Execution, permitting and resource variability risks
Targets depend on successful project commercialization, interconnection/permitting and capital access; delays or unfavorable outcomes can defer CAFD growth. Seasonal weather variability (e.g., below-median wind) adds operational volatility, increasing the probability of missed near-term cashflow milestones.
Clearway Energy (CWEN.A) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.20B
Dividend Yield5.6%
Average Volume (3M)281.45K
Price to Earnings (P/E)23.4
Beta (1Y)0.20
Revenue Growth2.54%
EPS Growth124.89%
CountryUS
Employees60
SectorUtilities
Sector Strength65
IndustryRenewable Utilities
Share Statistics
EPS (TTM)-0.88
Shares Outstanding34,613,853
10 Day Avg. Volume340,012
30 Day Avg. Volume281,452
Financial Highlights & Ratios
PEG Ratio0.26
Price to Book (P/B)2.06
Price to Sales (P/S)2.77
P/FCF Ratio10.73
Enterprise Value/Market Cap2.14
Enterprise Value/Revenue12.27
Enterprise Value/Gross Profit24.38
Enterprise Value/Ebitda16.15
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.04
Revenue Forecast (FY)$1.66B
Clearway Energy Business Overview & Revenue Model
Company DescriptionClearway Energy, Inc. operates in the renewable energy business in the United States. It has approximately 5,000 net megawatts (MW) of installed wind and solar generation projects; and approximately 2,500 net MW of natural gas generation facilities. The company was formerly known as NRG Yield, Inc. and changed its name to Clearway Energy, Inc. in August 2018. Clearway Energy, Inc. was incorporated in 2012 and is based in Princeton, New Jersey. Clearway Energy, Inc. is a subsidiary of Clearway Energy Group LLC.
How the Company Makes MoneyClearway Energy makes money primarily by owning interests in power generation projects and earning contracted cash flows from selling electricity (and, where applicable, capacity and renewable attributes) to customers under long-term contracts. The core revenue stream is power sales under power purchase agreements (PPAs) and similar offtake contracts, where a utility or other buyer agrees to purchase a project’s output at agreed pricing terms; these contracts are designed to provide predictable revenue over time. Depending on the specific asset and contract structure, revenue can include: (1) energy revenue from megawatt-hours produced and delivered; (2) capacity or availability payments for being able to supply power during certain periods or for meeting reliability requirements; and (3) sales of environmental/renewable attributes (e.g., renewable energy credits) when those attributes are retained by Clearway Energy rather than bundled into the PPA price. The company’s earnings and cash available for distribution are influenced by operational performance (generation volumes and plant availability), contract terms (fixed vs. indexed pricing, escalators, curtailment provisions), and the credit quality of counterparties. Clearway Energy also benefits from a sponsor relationship with Clearway Energy Group, which has historically served as a source of asset acquisitions ("dropdown" transactions) and operational expertise; however, specific commercial terms or transaction details are null.
Clearway Energy Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong execution on growth commercialization, meaningful capacity additions, robust sponsor-enabled opportunities, a deep late‑stage pipeline and disciplined capital markets execution (e.g., $600M notes, $100M equity), all supporting reiterated 2026 guidance and clear 2030 CAFD per share targets. Near-term challenges include below‑median wind in Q4, timing-related solar impacts, modest immediate CAFD uplift from some recontracting transactions, and continued dependence on successful permitting, interconnection and capital raises to fully realize targets. On balance, the positive operational and pipeline progress and solid funding execution outweigh the near-term operational and funding execution risks.Q4-2025 Updates
Positive Updates
Full-Year CAFD Above Guidance Midpoint
Clearway delivered full-year cash available for distribution (CAFD) of $430 million, above the original guidance midpoint of $420 million (guidance range $400M–$440M), approximately +2.4% above the midpoint. Management reaffirmed 2026 CAFD guidance of $470M–$510M and reiterated a 2027 CAFD per share target of $2.70 or better.
Material Capacity Additions and Contracting Activity
Enterprise added ~1.3 GW of value-enhancing projects in 2025 and signed ~2 GW of new PPAs with hyperscalers in 2025, with additional gigawatts of revenue contracting opportunities under discussion.
Strong Development Commercialization and Pipeline Depth
100% of planned repowerings and new construction projects in the 2026 and 2027 vintages are commercialized; nearly 50% of late-stage megawatts in the 2028 vintage are contracted. The 2029 vintage includes development activity of over ~7 GW, providing redundancy well above what is needed to hit 2030 goals.
Clear 2030 CAFD per Share Target with CAGR Expectation
Company reaffirmed a 2030 CAFD per share target of $2.90–$3.10, representing an expected 7%–8% CAGR from 2025 and management confidence in meeting the target through identified/commercialized projects and sponsor-enabled growth.
Repowerings and Yield Targets
Repowerings totaling more than 900 MW are on schedule for 2027 commercial operations and are expected to deliver attractive CAFD yields in excess of 11%, while extending useful life of wind assets.
Capital Markets Execution and Funding Optionality
Closed an upsized $600M senior unsecured note due 2034 at an attractive spread (second-tightest high-yield spread in the power sector since 2020), executed $100M of opportunistic equity issuance (least dilutive in platform history), and reported stock price appreciation of over +30% since late August. Management says it can deploy at least $650M incremental corporate capital over 2028–2030 and remains targeting a BB credit rating and long-term payout ratio below 70%.
Q4 Operating and Financial Results
Fourth-quarter adjusted EBITDA was $237 million and quarterly CAFD was $35 million. Full-year performance benefited from on-time commercial operations, accretive third‑party M&A and strong fleet performance that drove full-year CAFD above guidance midpoint.
Sponsor-Enabled Growth Momentum (CWEN)
All CWEN committed projects are under construction and progressing to milestones; Royal Slope received an offer for investment and Honeycomb II battery phase is a potential CWEN investment with an offer expected later in 2026, supporting sponsor-enabled growth runway.
PPA Pricing Environment Improved
Management reported a favorable and sustained PPA pricing environment across geographies, noting PPA pricing in comparable markets is roughly double levels from three years ago, supporting attractive returns for new development.
Strategic Opportunities for Co‑located Digital Infrastructure
Clearway Group is developing multi-technology generation complexes across five states to serve data-center demand; first-generation resources at these complexes could come online as soon as late 2028, creating additional accretive investment pathways similar in return profile to traditional long-term contracted assets.
Negative Updates
Quarterly Renewable Resource Shortfall
In Q4 wind resource was below median expectations across the fleet (including California), and solar performance was impacted by the timing of debt service related to growth investments, contributing to comparatively modest quarterly CAFD of $35 million.
Near-Term CAFD Impact from Recontractions Relatively Small
Management indicated recontracting and ERCOT revenue enhancements reduce merchant exposure and improve quality of earnings but estimated near-term CAFD uplift from individual recontracting instances is single-digit millions — limited incremental CAFD impact in the near term versus long-term value.
Execution and Funding Dependence to Hit 2030 Targets
Meeting the 2030 CAFD per share target relies on successful commercialization, contract wins, timely interconnection/permitting and future capital raises (debt and equity). Management plans additional debt and equity issuance as needed, highlighting execution and capital markets risk.
Seasonal/Weather and Market Variability Risks
Management noted winter storms and variability in resource performance affect operations and pricing (wind below median in Q4). These weather-driven fluctuations introduce volatility into quarterly results and near-term CAFD.
Company Guidance
Clearway reiterated 2026 CAFD guidance of $470M–$510M (midpoint assuming P50 renewable production) after reporting 2025 CAFD of $430M (above the $400M–$440M range) and Q4 adjusted EBITDA of $237M with Q4 CAFD/FCF of $35M; the company affirmed a 2027 CAFD per share target of $2.70+ and a 2030 CAFD per share target of $2.90–$3.10 (a 7%–8% CAGR from 2025) with expected 5%–8%+ CAGR beyond 2030. Execution metrics include 1.3 GW added in 2025, ~2 GW of PPAs signed with hyperscalers in 2025, repowerings >900 MW (targeting >11% CAFD yields) and 100% commercialization of 2026–2027 planned projects; Clearway has identified ~$1.3B of 2027/2028 corporate capital opportunities at ~10.5%+ CAFD yield, >7 GW of 2029 development activity with potential to deploy >$600M in 2029, and at least $650M of incremental capital available for 2028–2030. Financial policy targets include a long-term payout ratio <70% after 2030, maintaining ~4.0x–4.5x leverage and a BB credit rating goal; recent funding actions include a $600M senior unsecured note due 2034 and ~$100M of equity issued since late August.Clearway Energy Financial Statement Overview
Summary
Operations and cash generation are steady (positive operating cash flow and free cash flow across years) with improved net profitability in 2025, but the balance sheet is a notable constraint: debt is high (~$9.4B in 2025) and leverage has been elevated historically. Profitability and cash conversion show some volatility/quality concerns, keeping the score mid-range.Income Statement
Revenue has been relatively steady with modest growth overall (about $1.20B in 2020 to $1.43B in 2025), but year-to-year growth is inconsistent. Profitability improved in 2025 with net margin rising to ~11.8% (vs. ~6.4% in 2024), although earnings quality looks volatile given the unusually high profitability in 2022 and margin reporting inconsistencies in 2025 (gross/operating margin fields appear unreliable for that year). EBITDA remains solid, but the earnings trajectory is not smooth, which tempers the score despite generally positive recent net income.66
Positive
Balance Sheet
Leverage is the key constraint: total debt is high and has increased to ~$9.4B in 2025. While equity expanded meaningfully by 2025 (supporting the debt load better than prior years), leverage still sits around ~1.6x debt-to-equity in 2025 and was very high in 2021–2024 (~3.3x–4.5x), indicating balance-sheet risk and sensitivity to rates/refinancing. Asset growth is positive, but the capital structure remains debt-heavy for a utility-style business.48
Neutral
Cash Flow
Operating cash flow is consistently positive (roughly $545M–$787M over 2020–2024, $688M in 2025) and free cash flow is also positive each year, supporting funding capacity. However, free cash flow declined in 2025 (about -16% growth) and cash conversion softened, with operating cash flow running below net income in 2025 (coverage ~0.68x), suggesting less cushion and potential working-capital/timing effects. Overall cash generation is steady but not consistently improving.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.43B | 1.37B | 1.31B | 1.19B | 1.29B |
| Gross Profit | 217.00M | 870.00M | 841.00M | 755.00M | 835.00M |
| EBITDA | 1.10B | 1.08B | 1.03B | 2.20B | 904.00M |
| Net Income | 169.00M | 88.00M | 79.00M | 582.00M | 51.00M |
Balance Sheet | |||||
| Total Assets | 16.66B | 14.33B | 14.70B | 12.31B | 12.81B |
| Cash, Cash Equivalents and Short-Term Investments | 818.00M | 332.00M | 535.00M | 657.00M | 179.00M |
| Total Debt | 10.20B | 7.75B | 8.66B | 7.36B | 8.27B |
| Total Liabilities | 10.74B | 8.77B | 9.71B | 8.28B | 9.51B |
| Stockholders Equity | 1.92B | 2.06B | 2.10B | 2.23B | 1.83B |
Cash Flow | |||||
| Free Cash Flow | 369.00M | 483.00M | 408.00M | 675.00M | 550.00M |
| Operating Cash Flow | 688.00M | 770.00M | 702.00M | 787.00M | 701.00M |
| Investing Cash Flow | 321.00M | -725.00M | -523.00M | 1.13B | 88.00M |
| Financing Cash Flow | -924.00M | -363.00M | -124.00M | -1.57B | -600.00M |
Clearway Energy Technical Analysis
Positive
33.86
Price Trends
34.54
Positive
32.84
Positive
30.35
Positive
Market Momentum
0.87
Negative
75.25
Negative
90.20
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWEN.A, the sentiment is Positive. The current price of 33.86 is below the 20-day moving average (MA) of 36.46, below the 50-day MA of 34.54, and above the 200-day MA of 30.35, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 75.25 is Negative, neither overbought nor oversold. The STOCH value of 90.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CWEN.A.
Clearway Energy Risk Analysis
Clearway Energy disclosed 49 risk factors in its most recent earnings report. Clearway Energy reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Clearway Energy Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $8.20B | 23.42 | 5.91% | 5.60% | 2.54% | 124.89% | |
67 Neutral | $3.95B | 21.38 | 12.18% | 0.99% | 45.09% | 50.54% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
56 Neutral | $6.57B | 54.13 | 4.95% | 0.42% | 6.07% | 12.07% | |
55 Neutral | $7.39B | -2.94 | -1196.72% | 3.84% | 5.93% | -39.88% | |
55 Neutral | $1.91B | -231.49 | 10.05% | ― | 42.09% | 219.69% | |
50 Neutral | $3.03B | -14.43 | -12.87% | ― | -16.15% | -324.40% |
* Utilities Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.