Bank of America Securities analyst Julien Dumoulin Smith reiterated a Buy rating on NRG Energy (NRG – Research Report) today and set a price target of $47.00.
Julien Dumoulin Smith has given his Buy rating due to a combination of factors. The first being the strong operational performance of NRG Energy to date, which is expected to be further demonstrated in the forthcoming earnings update. Of particular note is the robust fleet performance over the summer, complemented by procurement improvements, that collectively support a potential guidance increase. Equally, the reaffirmation of targets set out at the recent Analyst Day, coupled with the potential for upside from the demand response offering, is expected to underpin confidence in the management team.
Another important factor is the anticipated positive trend in key performance indicators (KPIs) related to the integration of Vivint. Early signs of successful integration and cross-selling initiatives are expected, as evidenced by the increase in subscriber count, monthly recurring revenue, and service margin in the previous quarter. The success of retail power penetration into the existing Vivint customer base is critical, as management seeks to monetize data through the VPP program, potentially leading to a significant earnings increase. Finally, a forecast EBITDA for 3Q23 of $937Mn, which represents a sizable YoY increase, primarily driven by Vivint’s contribution, further supports the Buy rating.
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NRG Energy (NRG) Company Description:
NRG Energy, Inc. engages in the production, sale, and distribution of energy and energy services. It operates through the following segments: Generation, Retail, and Corporate. The Generation segment includes all power plant activities, domestic and international, as well as renewables. The Retail segment includes mass customers and business solutions, and other distributed and reliability products. The Corporate segment includes residential solar and electric vehicle services. The company was founded in 1989 and is headquartered in Princeton, NJ.
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