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NRG Energy Offers a Strong Potential Upside

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Dec. 28 2018, Updated 12:35 p.m. ET

NRG Energy

According to Wall Street analysts, NRG Energy (NRG) stock has a median target price of $44.5—compared to its current market price of $36.2. The target price implies an estimated upside of ~23% for the next 12 months. NRG Energy has the highest “buy” ratings from 90% of the ten analysts tracking the stock. Four analysts recommended a “strong buy,” five recommended a “buy,” and one recommended a “hold.” None of the analysts recommended a “sell.”

The above chart shows how analysts’ views on NRG Energy stock have changed in the past six months.

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Why NRG Energy stood out

NRG Energy’s healthy year-over-year EPS growth in 2018 and being on-track with its transformation plan played out well for the stock. The transformation plan was introduced by activist shareholders in NRG Energy last year. The plan focused on streamlining the company’s operations and trimming down the total debt. NRG Energy is one of the top-rallied stocks in 2018. So far, the stock has risen ~30%. NRG Energy stock has been on a solid uptrend since last year. The stock rose ~250% after activist shareholder Elliott Management disclosed its stake in the company in January 2017.

Peers’ target prices

AES (AES) has a median target price of $16.2—compared to its current market price of $13.8, which indicates a potential upside of 17% for the next 12 months.

SCANA (SCG) has a mean target price of $49.4, which implies an upside potential of 5% for the next year. Currently, SCANA is trading at $47.2.

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