Analyst price targets
Based on consensus estimates, NRG Energy (NRG) stock has a target price of $47.0, which indicates an upside potential of almost 14% against its current price of $41.4 over the next 12 months. Morgan Stanley raised NRG’s target price from $46.0 to $47.0 last week.
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Among the 11 Reuters-surveyed analysts tracking NRG Energy, three recommended a “hold,” four recommended a “strong buy,” and four recommended a “buy” while none recommended a “sell” as of April 25.
Peer price target
Among the ten analysts tracking AES (AES), five recommended a “hold,” one recommended a “sell,” and four recommended a “buy.” Analysts’ median target price of $18.1 for AES implies a potential upside of ~2%, compared to its current market price of $17.7 over the next 12 months.
Despite a discounted valuation compared to peers, NRG Energy stock seems to be a risky bet at the moment. Generally, investors take shelter under safe-haven utility stocks (XLU) in search of dividends when the broader markets are rough. NRG Energy’s earnings outlook and financials have improved over the last few years. However, its petty dividends and relatively volatile stock movements make it an exception among utilities.
Check out my weekly review of utilities in Analyzing Utilities’ Charts, Valuation, Price Targets, and More.