NRG-CALP Merger Looks Productive

The news this morning that regional energy producer NRG (NRG - Snapshot Report) has offered $11.3 billion for rival Calpine (CALP - Analyst Report) seems to taking advantage of an opportunity in the still-booming energy sector.  The deal would make the merged company the largest independent electricity producer in the U.S.

Not much analyst activity has taken place in the very near term -- in the last month, two analysts raised next-quarter estimates, while two others lowered those estimates.  For Calpine, one upgrade and one downgrade has been made for the upcoming quarter in the last 30 days.

The story is in the long-term revisions: Caliper's fiscal 2008 estimates have been taken upward by all four analysts covering the stock within the past month, and three of the four revised upward for fiscal 2009.  Assumptions that the merger may take that long to fully implement still represents a tidy upswing in the next 18 months for CALP shareholders.