# NRG Energy (NRG) Sector: Power generation and retail electricity | Field | Value | |---|---| | Price | $98.05 | | Market cap | $21B | | Intrinsic value source | Analysts | | Data as of | 2026-11-13 | | Next earnings | 2027-02-23 (estimate) | Analysts: Bullish Picks: Research only Discount category: Close to intrinsic value ## In short The market doubts the power prices and the high debt of NRG Energy after the LS Power deal, and the close of the asset sale with steady results through 2027 can lift its value. ## Themes and gap - Themes: Power and energy (power-energy), High debt (leverage), Regulation and courts (regulation-legal) - Gap type: Can close (closable) - Why: The ERCOT report on data centers in December 2026, the Q4 2026 report in early 2027 and the close of the asset sale, expected in Q2 2027, show whether the debt and buyback plan work. ## About NRG Energy, Inc. (NRG) is based in Houston, Texas. It sells electricity, natural gas and smart home services to about 8 million residential customers in North America, under brands such as Reliant, Direct Energy, Green Mountain Energy and Vivint. It also sells power to commercial, industrial, data center and wholesale customers. It owns about 25 GW of power plants, mostly in Texas (ERCOT) and in the PJM market in the eastern United States. On January 30, 2026, it bought about 13 GW of natural gas and dual fuel plants and the demand response business CPower from LS Power. Adjusted EBITDA was $2,013 million in Q3 2026 and $4,310 million for nine months. The common stock trades on the NYSE in US dollars. NRG files 10-K and 10-Q reports. ## Thesis The price of NRG depends on whether power prices and capacity payments stay high enough to carry the debt that it took on for the LS Power plants. Debt and finance leases were $22,923 million at September 30, 2026, and cash was $148 million. NRG guides 2027 adjusted EPS of $8.05 to $10.05 and free cash flow before growth investments of $2.9 billion to $3.4 billion, before the effect of a planned asset sale. For the price to rise, four things must be true. The sale of 4.9 GW of plants to LS Power for $4 billion must close in Q2 2027, so that NRG can buy back shares and repay $3 billion of debt in 2027. Texas rules for data centers must let new demand connect, after the governor ordered an audit of the data centers in the ERCOT queue on August 3, 2026. PJM capacity prices must stay near the cap of $325/MW-day of the 2028/2029 auction. The retail business must keep its margins when power costs move. The ERCOT report on data centers, due in December 2026, and the Q4 2026 report, expected in late February 2027, are the next tests. If power prices fall or the asset sale fails, the debt can keep the price low. ## Checkpoints - Dec 2026 (estimate): ERCOT report on data centers. Status: Pending. Watch: ERCOT confirms most large data center projects of the first batch and the PUCT keeps a clear path to connect them, and this passes; a large cut of the queue fails. - Feb 23, 2027 (estimate): Q4 2026 results. Status: Pending. Watch: 2026 adjusted EPS is in the guided range of $7.90 to $9.90 and NRG keeps its 2027 guidance of $8.05 to $10.05, and this passes; a cut of the 2027 guidance fails. - Q2 2027 (estimate): Close of the 4.9 GW asset sale. Status: Pending. Watch: The sale to LS Power closes for about $4 billion and NRG repays debt and buys back shares as planned, and this passes; a delay past 2027 or a lower price fails. ## Balance sheet - Cash: $148M - Debt: $22.9B - Net debt: $22.8B - Debt due within 12 months: $1.1B At September 30, 2026, NRG had cash and cash equivalents of $148 million and restricted cash of $29 million. Debt and finance leases were $22,923 million, of which $1,079 million was current. This includes Unsecured Senior Notes of $12.0 billion and Senior Secured First Lien Notes of $3.9 billion. The revolving credit facility and the collateral facilities had $5,850 million available, so total liquidity was $6,027 million. NRG also has $650 million of 10.25% Series A Preferred Stock. Through October 31, 2026, it bought back shares for $977 million and paid dividends of $302 million in 2026. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/1013871/000101387126000025/nrg-20260930.htm - https://www.sec.gov/Archives/edgar/data/1013871/000101387126000022/nrgq32026ex991.htm ## Dividends - Dividend yield: 1.9% (last 12 months, at the current price) - Paid per share, last 12 months: $1.90 (4 payments) - Current annual rate: $1.90 ($0.475 x 4 a year) - Payout ratio: 44% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-11-02, $0.475 per share - Growth from 2020 to 2025: 8.0% a year - Growth from 2015 to 2025: 11.7% a year Dividends per share by year: 2016: $0.235, 2017: $0.12, 2018: $0.12, 2019: $0.12, 2020: $1.20, 2021: $1.30, 2022: $1.40, 2023: $1.512, 2024: $1.632, 2025: $1.76. Source: company filings and market data, read on 2026-11-12. ## Recent events - 2026-11-09: NRG reported Q3 2026 results. GAAP net income was $561 million, against $152 million, and adjusted EBITDA was $2,013 million, against $1,205 million. It kept its 2026 guidance and gave 2027 guidance of adjusted EPS of $8.05 to $10.05. It plans to raise the annual dividend to $2.05 per share in 2027. - 2026-11-09: NRG agreed to sell six natural gas plants with 4.9 GW in New York, New England and Texas to LS Power for $4 billion in cash. It expects the sale to close in Q2 2027, after approvals that include FERC and the New York State Public Service Commission. It plans $3 billion of share buybacks across 2026 and 2027 and $3 billion of debt reduction in 2027. - 2026-08-03: The Governor of Texas directed the PUCT and ERCOT to verify and audit all data centers in the interconnection process. ERCOT plans to file its report on the first batch with the PUCT in December 2026. - 2026-07-14: PJM announced the results of its capacity auction for the 2028/2029 delivery year at the cap of $325/MW-day for the full PJM area. About 6,839 MW of NRG plants cleared, and NRG expects capacity revenues of about $811 million for that year. - 2026-05-26: The T.H. Wharton plant in Texas, 415 MW, started commercial operations. A loan of $216 million from the Texas Energy Fund supports it. ## Latest news and filings - Last earnings: 2026-11-09 (8-K: https://www.sec.gov/Archives/edgar/data/1013871/000101387126000022/) - Next earnings: 2027-02-23 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-11-12 | 8-K | New material agreement | | | https://www.sec.gov/Archives/edgar/data/1013871/000110465926125375/tm2629511d1_8k.htm | | 2026-11-09 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | nrg-20260930 | https://www.sec.gov/Archives/edgar/data/1013871/000101387126000025/nrg-20260930.htm | | 2026-11-09 | 8-K | Investor disclosure | | | https://www.sec.gov/Archives/edgar/data/1013871/000110465926124147/tm2629302d1_8k.htm | | 2026-11-09 | 8-K | Earnings release | | nrg-20261109 | https://www.sec.gov/Archives/edgar/data/1013871/000101387126000022/ | | 2026-08-04 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | nrg-20260630 | https://www.sec.gov/Archives/edgar/data/1013871/000101387126000020/nrg-20260630.htm | | 2026-08-04 | 8-K | Earnings release | | nrg-20260804 | https://www.sec.gov/Archives/edgar/data/1013871/000101387126000018/ | | 2026-07-15 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1013871/000110465926083743/tm2620335d1_8k.htm | | 2026-05-21 | 8-K | Change of directors or officers and Investor disclosure | | | https://www.sec.gov/Archives/edgar/data/1013871/000110465926064884/tm2615243d1_8k.htm | | 2026-05-06 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | nrg-20260331 | https://www.sec.gov/Archives/edgar/data/1013871/000101387126000012/nrg-20260331.htm | | 2026-05-06 | 8-K | Earnings release | | nrg-20260506 | https://www.sec.gov/Archives/edgar/data/1013871/000101387126000010/ | Every filing on SEC EDGAR (CIK 1013871): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001013871&type=&dateb=&owner=include&count=40 ## Risks - High: Debt is high after the LS Power acquisition. Debt and finance leases were $22,923 million at September 30, 2026, and unrestricted cash was $148 million. The plan to repay debt depends on the close of the $4 billion asset sale. - High: Earnings depend on weather and power prices. A mild winter cut heating degree days in Texas by about 30% in early 2026, and Winter Storm Fern raised power supply costs in the East. - Medium: Market rules can change. FERC delayed the PJM backstop procurement to February 2027, Exelon asked FERC on November 3, 2026 to change the PJM capacity auction schedule, and Texas is still writing rules for large loads. - Medium: The asset sale needs approvals, including FERC, the New York State Public Service Commission and the HSR review. If it does not close, NRG must change its buyback and debt plan. - Medium: Hedge accounting moves GAAP results. Unrealized losses on economic hedges reduce GAAP net income when natural gas prices fall, but the related customer contracts are not marked to market. ## Links - Page: https://picks.utilarium.app/company/NRG/ - History of changes: https://picks.utilarium.app/company/NRG/history/ - JSON with full history: https://picks.utilarium.app/data/company/NRG.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.