NRG Energy (NRG) stock was trading at an EV-to-EBITDA valuation of 13x—higher than its five-year historical valuation. On average, utilities are trading at an EV-to-EBITDA valuation of ~10.5x. NRG Energy seems to be trading at a fair premium compared to its peers and historical valuation.
As we mentioned earlier, NRG Energy stock rose more than 130% last year. Involvement of activist shareholders and the transformation plan fueled NRG Energy’s rally in 2017.
To learn what’s behind utilities’ recent weakness, read How Utilities Stocks Performed Last Week.