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4Q Earnings Preview: NRG Energy Investors Brace for More Swings

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Part 7
4Q Earnings Preview: NRG Energy Investors Brace for More Swings PART 7 OF 7

What Analysts Recommend for NRG Energy ahead of 4Q16 Earnings

NRG Energy: Price targets

According to Wall Street analysts, NRG Energy’s (NRG) price target for the next year is $18.46, which implies an estimated gain of nearly 8% in the next year from its current price of $17.10.

Of the 14 analysts tracking NRG Energy, five recommend it as a “buy,” four recommend it as a “strong buy,” and five recommend it as a “hold.” Interestingly, none of the analysts have a “sell” recommendation on NRG Energy as of February 21, 2017.

What Analysts Recommend for NRG Energy ahead of 4Q16 Earnings

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Calpine (CPN) has a one-year median price target of $15.30 compared to its market price of $11.47, which implies an upside of 33%. For Dynegy (DYN), Wall Street analysts have a median price target of $13.40, which implies a gain of 42% in one year from its current market price of $9.40.

Utility giants like Duke Energy (DUK) and Southern Company (SO) have nearly 2%–3% estimated upsides from their one-year price targets.

NRG Energy: Outlook

Some may consider NRG Energy a misfit in the S&P 500 Utilities Index (XLUconsidering its volatile stock price movements. Also, utilities at large are currently trading at a dividend yield of 3.5% while NRG trades at a yield of 0.7%.

NRG Energy might appear attractive to investors after gaining 80% in the last one year. It may also be on the growth path after the recent activist involvement. However, fundamental weakness among power producers may persist considering poor power demand and lower power prices.

To learn more about how utilities may be positioned in 2017, please read Hawkish Fed or Helpful Weather: What Will Drive Utilities in 2017?

For more industry analysis, read D, DUK, NEE, and SO: Top Utilities’ Dividends.

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