How Calpine Stock Is Valued Compared to Its Peers
On March 27, 2017, Calpine stock was trading at an EV-to-EBITDA valuation multiple of 10.0x. US utilities’ (XLU) average multiple is just above 10.0x.
NRG, Calpine, and Dynegy extend losses for second week in a row
Dynegy Inc. (DYN), NRG Energy Inc. (NRG), and Calpine Corporation (CPN) were among the top four losers in the utility sector for the second successive week.
Exelon is one of the leanest power utilities in the US
For 4Q14, Exelon’s debt-to-equity ratio was 0.92x. Its operations are fairly underleveraged. It has one of the leanest debt metrics in the power utility industry.
NRG, DYN, CPN: How Are Merchant Power Stocks Positioned in 2017?
Merchant power producers have been under tremendous pressure in the last few years due to many factors.
Must-know: Why Dynegy doubles capacity
After the deal, Dynegy’s (DYN) total generation capacity will double to 26 gigawatts (or GW). As a result, Dynegy’s capacity will be at par with the third largest competitive U.S. generator among the independent power producers (or IPPs)—Calpine Corporation (CPN).
How Total Returns of Merchant Power Players Are Faring
Merchant power companies have dug a deep hole in investors’ pockets in the last one year.
Oaktree Capital Sheds Nearly Half Its Holdings in NRG Energy
NRG Energy is a US-based integrated retail electricity and wholesale power-generation firm. The company has 2.5 million residential customers across the US.
Dynegy: Aggressive Expansion Could Get the Stock Back on Track
Dynegy (DYN) has taken an aggressive stance from the last couple of quarters and has added several power generation assets to its current portfolio.
What Analysts Predict for NRG Energy
According to Wall Street analyst estimates, NRG Energy (NRG) has a mean price target of $30.6 against its current market price of $24.92.
Why NRG Energy Stock Could Continue to Soar
NRG Energy (NRG), the largest independent power producer, seems ready to continue its bull run since it has significantly outperformed its peers so far this year.
NRG Energy’s Retail Operational Stats for 2Q16
NRG Energy’s (NRG) Retail segment posted $213 million adjusted EBITDA in 2Q16. It was $209 million in the same quarter last year.
NRG Energy’s Price Targets and Analyst Recommendations
According to Wall Street analysts, NRG Energy’s (NRG) price target for the next year is $20.36. That implies an estimated rise of nearly 12.0%.
What Does the Correlation between NRG and Natural Gas Mean?
NRG Energy (NRG) is the largest merchant power player in the United States. It has a generation fleet dominated by coal.
A Look at NRG Energy’s Implied Volatility
As of August 19, 2016, NRG Energy (NRG) has the highest implied volatility of all the utility companies. Its implied volatility is 46.8%. NRG’s 15-day average implied volatility is 45.8%.
Maverick Capital sells its stake in Express Scripts Holding
Maverick Capital exited a 3.5% position in Express Scripts Holding Co. (ESRX). The position was initiated in 3Q 2013.
How Has Calpine Stock Performed Recently?
Calpine (CPN) is one of the most beaten down stocks among US merchant power players. The stock has corrected more than 7.0% so far this year.
Must-know: Duke’s revenue growth over the years
Duke Energy (DUK) reported a jump of 27.6% year-over-year (or YoY) growth in earnings per share (or EPS) in its 2Q14 results. Favorable weather and a lower effective tax rate strengthened the regulated utilities business.
Why did the market punish Exelon?
Exelon Corporation’s (EXC) stock has been hammered in the last six years. In 2008, the stock was trading at ~$90 per share. Early this year, the stock was available at less than $27 per share.
What Analysts Recommend for NRG Energy ahead of 4Q16 Earnings
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.
Why Exelon needs to change its strategy
Exelon paid the price for aggressively pushing only one segment in its business. Now, it wants to stabilize its earnings. The retail utility business will provide stability.
Utilities Come under Pressure as September Fed Meeting Nears
All 40 utilities we track saw a fall in their stock prices during the week ending September 4. The broad-based SPDR S&P 500 ETF (SPY) lost a whopping 3.5% during the week.
AES, NRG, CPN: Could Overvalued Utilities Get More Expensive?
On July 11, 2016, AES was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 8.6x.
Analysts’ Views on NRG Energy Stock Changed Recently
According to Wall Street analysts’ estimates, NRG Energy (NRG) stock has a mean target price of $32.9—compared to its current market price of $26.8.
Falling gas prices are negative for unregulated power players
Natural gas prices fell by 9.9% for the week ending on January 30, 2015. Natural gas futures closed at $2.69 per MMBtu on Friday.
Must-know: Understanding Duke’s strategy
In recent years, Duke Energy (DUK) made its intent very clear. It concentrates on its regulated utilities—its core business—instead of other areas. The regulated utilities business is Duke’s strength.
What Do Dynegy’s Chart Indicators Show?
There isn’t a high chance of the stock recovering soon. On March 22, Dynegy was trading 20% and 38% below its 50-day and 200-day moving average levels.
Does NRG Energy Stock Seem Expensive?
On July 6, 2017, NRG Energy (NRG) stock was trading at an EV-to-EBITDA multiple of 11.5x. It has a five-year historical EV-to-EBITDA ratio of ~11.0x.
Oaktree Capital Enhances its Position in Dynegy by 28%
Dynegy offers wholesale power and ancillary services to municipalities, cooperatives, utilities, and other energy firms in five US states.
Will NRG Energy’s Transformation Plan Lead to Growth?
According to Wall Street analysts, NRG Energy (NRG) stock has a mean price target of $30.89 against its current market price of $25.97, which indicates a potential upside of 19% going forward.
Natural gas prices fall, affecting the power utilities industry
Natural gas is the second-largest source of power generation in the United States, after coal. In 2013, 27% of electricity was produced from natural gas.
The Hercules of the power sector in a falling market
Three power companies had positive returns for the week ended January 2, 2015. Returns for Dynegy (DYN) and Calpine (CPN) stood out in a falling US market.
Why was Dynegy interested in the acquisition?
Once the deal is complete, Dynegy will add 9,000 MW and 3,400 MW capacity in the PJM and New England markets, respectively.
Is Dynegy’s stock available cheap?
Dynegy currently trades at $31.03 per share. An EV/EBITDA multiple of 8x to 10x shows a big upside in Dynegy’s stock.
Low gas prices can make independent power producers uncomfortable
Natural gas is procured by power producers on short-term and spot contracts. Changes in gas prices affect unregulated power companies immediately.
NextEra Energy plays in regulated and unregulated utility markets
NextEra Energy is a Florida-based power company. Its subsidiaries are Florida Light & Power and NextEra Energy Resources.
Lee Ainslie’s Maverick Capital buys a stake in Catamaran Corp.
Pharmacy benefit manager Catamaran Corp. (CTRX) is a new position initiated by Maverick that accounts for 2.46% of the fund’s fourth quarter portfolio.
Albemarle Appointed Laurie Brlas to Board of Directors
For the week ended June 30, 2017, Albemarle (ALB) rose 0.7% and closed at $105.54.
A Closer Look at NRG Energy’s Current Valuation
On February 28, 2017, NRG Energy stock was trading at an EV-to-EBITDA valuation multiple of 9x. The average multiple of US utilities (XLU) stands just above 10x.
A Look at NRG Energy’s 4Q16 Revenues
Independent power producer NRG Energy (NRG) reported its 4Q16 and fiscal 2016 results on February 28, 2017. NRG reported total revenues of ~$2.5 billion for 4Q16, lower than its 4Q15 revenues of $3.0 billion.
Will NRG Energy Stock Continue Its Bull Run?
NRG Energy (NRG) stock continues to trade at a huge premium to its moving average levels.
Factors that Could Drive NRG Energy’s Revenues in 4Q16
NRG Energy (NRG), one of the largest independent power producers, is set to report its fourth quarter and 2016 financial results on February 28, 2017.
DYN, NRG, and CPN: A Look at Their Alarming Debt Profiles
Due to prolonged weak wholesale power prices, merchant power players’ cash flows from operations have remained stressed in the last few years.
Analyzing Merchant Power Companies’ Revenue Growth
The top lines of independent power producers (CPN) (NRG) have been under severe pressure due to weak wholesale prices and flattish electricity consumption growth.
How Are Merchant Stocks Valued?
On January 11, 2017, NRG Energy (NRG) was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) valuation multiple of 9x.
What’s behind NRG Energy’s Diminishing Dividends?
NRG Energy (NRG) is the only utility under our consideration that pays dividends. Dynegy (DYN) and Calpine (CPN) don’t pay dividends.
NRG, DYN, and CPN: Which Merchant Stock Returned the Most?
NRG Energy (NRG) leads the pack with total returns of 30% in the last one year.
Analysts’ Price Targets for NRG Energy after Its 3Q16 Earnings
Wall Street analysts’ consensus price target for NRG Energy (NRG) is $16.79. Its current market price is $11.03, implying a rise of 52% over the next year.
What Are Price Targets for NRG, CPN, and DYN?
According to Wall Street analyst estimates, NRG Energy (NRG) has an estimated upside of 54% in one year with a price target of $16.71.
NRG, DYN, CPN: Are Huge Upsides in Merchant Stocks Only a Mirage?
According to Wall Street analysts, NRG Energy (NRG) has an estimated upside of nearly 54% with a median price target of $16.86. It is currently trading at $10.98.
NRG and Other Merchant Power Players Offer Enticing Upsides
According to Wall Street analyst estimates, NRG Energy (NRG) has an estimated upside of 39% in one year with a price target of $17.86.
Broker Recommendations for NRG Energy ahead of Its 2Q16 Earnings
According to Wall Street analyst estimates, NRG Energy (NRG) has an estimated upside of 31% in one year with a price target of $18.14.
These Factors Could Drive NRG Energy’s Sales up in 2Q16
North America’s largest independent power producer, NRG Energy (NRG), is planning to report its 2Q16 financial results on August 9, 2016.
Are US Independent Power Producers’ Futures Bleak?
Merchant power generators have been the poorest performers in the last 12 months, considering their huge exposures to commodity prices.
Why NRG Energy Beat Earnings Estimates in Fiscal 1Q16
NRG Energy (NRG) reported earnings of $0.47 per share in 1Q16 against its loss of 0.35 per share in the same quarter last year.
NRG Energy Posts Strong 1Q16 Results: Stock Rises to 8-Month High
NRG Energy (NRG) rose to a nearly eight-month high after posting strong fiscal 1Q16 results on May 5, 2016. It beat analysts’ earnings as well as revenue estimates.
NRG Energy’s Margins Struggle as Wholesale Operations Weaken
NRG Energy (NRG) mainly generates revenue from its wholesale operations and renewable energy sales. In the last five years, NRG revenues nearly doubled, but earnings dwindled.
Will NRG Energy Sustain the Recovery?
More than half of NRG Energy’s market capitalization vanished last year. However, it has gained nearly 20% so far this year, mimicking regulated utilities (XLU).
Are Merchant Power Stocks Really Worth the Risk?
Weaker commodity (DBC) prices may continue to dampen wholesale power prices, which could influence NRG’s earnings.
NRG Energy Reports Heavy Loss in 4Q15 on Impairments
NRG Energy (NRG) reported its fourth quarter results on February 29, 2016. It reported a net loss of $6.4 billion in 4Q15 against its net income of $97 million in 4Q14.
Where Is Calpine Corporation Heading in 2016?
In its 3Q15 results commentary, Calpine management forecasted a 5% drop in adjusted EBITDA to $1.88 billion from $1.98 in 2015.
Marc Lasry Focuses on Energy in His ‘Portfolio with Purpose’
In an interview with CNBC on January 8, 2016, Marc Lasry, founder and CEO of Avenue Capital Group, said that the energy sector may have bottomed out.
Calpine Improved Its Performance in 3Q15
After the 3Q15 earnings report, Calpine rose by 3.8% to close at $15.51 per share on October 30, 2015.
Utilities Gain despite Rise in Treasury Yields
Utilities benefitted greatly from the low interest rates, as they took an opportunity to undertake capital expenditure at these low rates.
Utilities End Last Week of July in Style, Sector ETF Up 3.8%
All 41 utilities under our coverage gained during the week due to favorable macroeconomic data and strong earnings.
Friday the 13th is good for MGE Energy
MGE Energy rose 4.2% to end the March 13 week at $42.52 with a market capitalization of $1.5 billion. An interim report signaled strong annual earnings.
Why Exelon has healthy debt and leverage
The power utilities business is a capital intensive business. This is why utility companies’ debt is higher than other industries.
Must-know: Exelon’s position in the power industry
Exelon Corporation (EXC) is one of the largest power companies in the U.S. In 2013, Exelon reported operating revenues of $24.9 billion.
Must-know: Dynegy’s operational strategy
The PJM and New England regions are unregulated for power producers. After the deal is complete, the markets will represent 25% of Dynegy’s gross margin. Currently, the markets only contribute 11%. The region’s generating capacity will increase significantly from 18% now to 60% after the deal. This will give Dynegy superior pricing power.