NRG Energy Inc. (NRG): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We have downgraded our recommendation on NRG Energy Inc. to Neutral from Outperform, primarily due to unfavorable performance in first-quarter 2014. In addition increasing operating expenses, stringent utility regulations and disruption in fuel supply are causes of concern. The company reported a loss in first-quarter, which was wider than the Zacks Consensus Estimate. Higher operating expenses, and a rise in the number of shares outstanding and interest expenses led to weak earnings performance. However, the company's strategic acquisition program backed by strong financial position is expected to act as catalysts for its future growth. The acquisitions are in sync with NRG Energy's strategy to scale up its operations to meet increasing customer demand.

Overview:

Princeton, N.J.-headquartered NRG Energy Inc. is a wholesale power generation company engaged in the ownership, development, construction, and operation of power generation facilities. The company is also involved in the trade of fuel and transportation services the sale of energy, capacity, and related products in the United States and internationally and the supply of electricity and energy services to retail electricity customers in the Texas market.

NRG Energy has a significant presence in major competitive power markets in the United States, as well as a major retail electricity franchise in the Electric Reliability Council of Texas (ERCOT) market. The company's operations include competitive energy production and cogeneration facilities, power marketing, district heating and cooling production, thermal energy production and resource recovery facilities spread across North America and Australia. NRG Energy operates its retail activities under the brands like Reliant Energy, Green Mountain Energy and Energy Plus. NRG Energy's power plants generate electricity using a wide array of fuel sources including gas, coal, oil, nuclear and renewable energies (solar and wind).

As of April 1, 2014, NRG Energy's total net generation capacity stood at over 53,000 megawatt (MW).

Source: Company


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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