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


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We are upgrading our recommendation on NRG Energy Inc. to Neutral from Underperform, due to its stable liquidity position, systematic acquisitions, ongoing asset drop down and steady focus on expansion of its renewable portfolio. The company's drop-down strategy will streamline its operations while providing funds for growth ventures. The positive impact of earlier acquisitions continues to boost its performance by increasing customer count. However, stringent environmental regulations and dependence on weather conditions remain causes of concern. In the third-quarter 2014, NRG Energy's earnings missed the Zacks Consensus Estimate while revenues beat. On a year-over-year basis, both the top and bottom lines improved on positive outcomes from the acquisitions and higher sales volumes at the thermal business.


Princeton, NJ-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 U.S. 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 U.S., 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 Jun 30, 2014, NRG Energy's total net generation capacity stood at 52,094 megawatt (MW).

Source: Company

During the second-quarter 2014 earnings release, NRG Energy announced that it will restructure its retail, residential solar and home product and services businesses into NRG Home and the wind, large-scale solar and renewables-driven microgrid businesses into NRG Renew.

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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 Nasdaq, Inc.

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