We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shares of NRG Energy (NRG - Free Report) skyrocketed on Wednesday after the company announced that it is set to begin its “transformation plan” after pressure from activist investors mounted.
NRG, which has headquarters in both New Jersey and Houston, lost over $7 billion in the last two years. The power plant operator attempted to expand its business model under a former CEO, shifting away from coal and gas to solar and wind, but it ended up hurting the business and costing investors money.
The company came under fire from activist hedge fund Elliott Associates LP and Bluescape Energy Partners LLC in January. Since then, NRG has slowly worked on a debt reduction plan through a massive overhaul of its business practices.
NRG, which helps generate energy in 30 States and Canada, announced in its transformation plan today that it hopes to sell up to $4 billion in assets, cut costs, and lower its debt.
“The transformation plan announced today demonstrates our commitment to simplify and strengthen the company to thrive through any market cycle,” NRG President and CEO Mauricio Gutierrez said in a statement.
“This plan is the result of a comprehensive review of our entire business by the board and management to simplify our business, right-size our portfolio and strengthen our balance sheet to create significant value for all our stakeholders.”
An excerpt from the announcement goes on to state: “The Transformation Plan is designed to significantly strengthen earnings and cost competitiveness, lower risk and volatility, and create significant shareholder value. The three-part, three-year plan is comprised of targets in the areas of operational and cost excellence, portfolio optimization, and capital structure and allocation enhancement.”
NRG now plans to cut costs and remove $13 billion of debt in order to try to generate profit. The company announced that it might dump all of its renewable energy business, NRG Yield, as part of the new plan.
NRG Stock Today
Shares of NRG jumped 22.3% in early afternoon trading today after the company announced its plan to revamp its business. NRG’s stock now sits just above its previous 52-week high. The company is trading hands at nearly six times its average volume today at 29.7 million.
NRG is currently a Zacks Rank #2 (Buy). The stock also earned an “A” grade for Value; however, it scored a “C” for both Growth and Momentum in our Style Scores system.
Given the volatility that changes to regulations and economic policies can have on the energy sector, it might be wise to be cautious, especially when considering the political uncertainty surrounding Washington D.C.
However, NRG seems poised to try to turn the tides—even if it took some outside prodding. And if today is any indication, investors might slowly make their way back to the energy company.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NRG Energy (NRG) Stock Pops, Should You Buy?
Shares of NRG Energy (NRG - Free Report) skyrocketed on Wednesday after the company announced that it is set to begin its “transformation plan” after pressure from activist investors mounted.
NRG, which has headquarters in both New Jersey and Houston, lost over $7 billion in the last two years. The power plant operator attempted to expand its business model under a former CEO, shifting away from coal and gas to solar and wind, but it ended up hurting the business and costing investors money.
The company came under fire from activist hedge fund Elliott Associates LP and Bluescape Energy Partners LLC in January. Since then, NRG has slowly worked on a debt reduction plan through a massive overhaul of its business practices.
NRG, which helps generate energy in 30 States and Canada, announced in its transformation plan today that it hopes to sell up to $4 billion in assets, cut costs, and lower its debt.
“The transformation plan announced today demonstrates our commitment to simplify and strengthen the company to thrive through any market cycle,” NRG President and CEO Mauricio Gutierrez said in a statement.
“This plan is the result of a comprehensive review of our entire business by the board and management to simplify our business, right-size our portfolio and strengthen our balance sheet to create significant value for all our stakeholders.”
An excerpt from the announcement goes on to state: “The Transformation Plan is designed to significantly strengthen earnings and cost competitiveness, lower risk and volatility, and create significant shareholder value. The three-part, three-year plan is comprised of targets in the areas of operational and cost excellence, portfolio optimization, and capital structure and allocation enhancement.”
NRG now plans to cut costs and remove $13 billion of debt in order to try to generate profit. The company announced that it might dump all of its renewable energy business, NRG Yield, as part of the new plan.
NRG Stock Today
Shares of NRG jumped 22.3% in early afternoon trading today after the company announced its plan to revamp its business. NRG’s stock now sits just above its previous 52-week high. The company is trading hands at nearly six times its average volume today at 29.7 million.
NRG is currently a Zacks Rank #2 (Buy). The stock also earned an “A” grade for Value; however, it scored a “C” for both Growth and Momentum in our Style Scores system.
Given the volatility that changes to regulations and economic policies can have on the energy sector, it might be wise to be cautious, especially when considering the political uncertainty surrounding Washington D.C.
However, NRG seems poised to try to turn the tides—even if it took some outside prodding. And if today is any indication, investors might slowly make their way back to the energy company.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>