We are reaffirming our $41 per share fair value estimate for NRG Energy after the company announced $849 million of adjusted earnings before interest, taxes, depreciation, and amortization during the first quarter of 2024. We are reaffirming our no-moat rating and High Morningstar Uncertainty Rating.
NRG's transformation in 2017-20 cut the business in half, improved its credit metrics, and generated substantial cash to use for the dividend, stock buybacks, and acquisitions like Direct Energy and Vivint.
Federal and state environmental regulations and renewable energy goals could erode profitability at NRG's fossil-fuel power plants.
|
Metric
|
NRG
|
VST
|
AES
|
|---|---|---|---|
Price/Earnings (Normalized) | 20.09 | 29.66 | 10.56 |
Price/Book Value | 6.66 | 11.56 | 5.29 |
Price/Sales | 0.66 | 2.87 | 1.23 |
Price/Cash Flow | 8.82 | 9.48 | 5.12 |
|
Metric
|
NRG
|
VST
|
AES
|
|---|---|---|---|
Quick Ratio | 0.39 | 0.53 | 0.33 |
Current Ratio | 1.01 | 1.18 | 0.68 |
Interest Coverage | 4.21 | 4.10 | 0.66 |
|
Metric
|
NRG
|
VST
|
AES
|
|---|---|---|---|
Return on Assets (Normalized) | 2.80% | 4.01% | 3.59% |
Return on Equity (Normalized) | 30.02% | 40.47% | 80.05% |
Return on Invested Capital (Normalized) | 8.60% | 8.96% | 6.76% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
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