We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Will NRG's Acquisition and Capital Expenditure Set New Growth Path?
Read MoreHide Full Article
Key Takeaways
NRG's $12B LS Power deal boosts its capacity to over 25 GW, expanding reach in Texas and the Northeast.
NRG plans $1.3B annual capex through 2029 to modernize assets and advance grid reliability technologies.
NRG targets $3.7B debt reduction to strengthen balance sheet and aims to achieve net-zero emissions by 2050.
NRG Energy’s (NRG - Free Report) recent $12 billion acquisition of LS Power’s 12.9 gigawatts (GW) natural gas portfolio marks a transformative step in its evolution from a primarily retail-focused utility to a major player in U.S. power generation. This deal effectively doubles NRG’s generation capacity to more than 25 GW, significantly strengthening its presence in high-demand regions like Texas and the Northeast. Courtesy of this acquisition, NRG Energy is now better equipped to meet the surging electricity needs driven by AI data centers, electrification and rising domestic commercial and industrial demand.
NRG plans to deploy annual capex of $1.3 billion through 2029 in generation optimization, virtual power plant technology and grid reliability solutions. These efforts will focus on modernizing its newly acquired gas fleet, expanding distributed energy platform and supporting long-duration dispatchable capacity, which is essential for reliability in a decarbonizing grid. The new clean generation fleet will reduce emissions as NRG targets net-zero emissions by 2050 from the 2014 baseline.
NRG Energy has made notable strides in its transformation into an integrated power company by prioritizing customer-centric strategies. The company has been trying to slowly lower the proportion of debt in the capital mix for a while and is targeting $3.7 billion debt reduction over 24-36 months.
Looking ahead, as the United States enters a prolonged power demand supercycle, NRG Energy is uniquely positioned with the scale, asset base and capital discipline to benefit. With strong free cash flow and investor-aligned capital returns, the company offers an attractive opportunity for long-term growth and income.
Utilities Are Gearing Up to Meet Rising Clean Energy Demand
NextEra Energy (NEE - Free Report) expands its operations through organic projects and acquisitions. NEE will add more renewable projects to its portfolio and has nearly 28 GW of renewable projects in backlog. NextEra plans to deploy more than 7.6 GW of battery storage to support the clean energy transition.
The Southern Company’s (SO - Free Report) Vogtle Unit 4, in service from April 2025, has been marking the completion of America’s first newly constructed nuclear units in more than three decades. SO’s large load pipeline now exceeds 50 GW across its electric subsidiaries. Southern is ready to meet clean energy demand from data centers and industrial customers.
NRG’s Return on Equity Better Than Industry
Return on equity (ROE) is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. The current ROE of NRG Energy indicates that it is using shareholders’ funds more efficiently than peers in its industry..
Image Source: Zacks Investment Research
NRG Energy’s Shares Trading at a Premium
The company is currently valued at a premium compared with its industry on a forward 12-month P/E basis. NRG Energy is currently trading at 18.73X compared with the industry average of 15.17X.
Image Source: Zacks Investment Research
NRG Energy’s Earnings Estimates Moving North
The Zacks Consensus Estimate for NRG’s earnings per share indicates year-over-year increase of 9.64% and 20.33% in 2025 and 2026, respectively.
Image: Bigstock
Will NRG's Acquisition and Capital Expenditure Set New Growth Path?
Key Takeaways
NRG Energy’s (NRG - Free Report) recent $12 billion acquisition of LS Power’s 12.9 gigawatts (GW) natural gas portfolio marks a transformative step in its evolution from a primarily retail-focused utility to a major player in U.S. power generation. This deal effectively doubles NRG’s generation capacity to more than 25 GW, significantly strengthening its presence in high-demand regions like Texas and the Northeast. Courtesy of this acquisition, NRG Energy is now better equipped to meet the surging electricity needs driven by AI data centers, electrification and rising domestic commercial and industrial demand.
NRG plans to deploy annual capex of $1.3 billion through 2029 in generation optimization, virtual power plant technology and grid reliability solutions. These efforts will focus on modernizing its newly acquired gas fleet, expanding distributed energy platform and supporting long-duration dispatchable capacity, which is essential for reliability in a decarbonizing grid. The new clean generation fleet will reduce emissions as NRG targets net-zero emissions by 2050 from the 2014 baseline.
NRG Energy has made notable strides in its transformation into an integrated power company by prioritizing customer-centric strategies. The company has been trying to slowly lower the proportion of debt in the capital mix for a while and is targeting $3.7 billion debt reduction over 24-36 months.
Looking ahead, as the United States enters a prolonged power demand supercycle, NRG Energy is uniquely positioned with the scale, asset base and capital discipline to benefit. With strong free cash flow and investor-aligned capital returns, the company offers an attractive opportunity for long-term growth and income.
Utilities Are Gearing Up to Meet Rising Clean Energy Demand
NextEra Energy (NEE - Free Report) expands its operations through organic projects and acquisitions. NEE will add more renewable projects to its portfolio and has nearly 28 GW of renewable projects in backlog. NextEra plans to deploy more than 7.6 GW of battery storage to support the clean energy transition.
The Southern Company’s (SO - Free Report) Vogtle Unit 4, in service from April 2025, has been marking the completion of America’s first newly constructed nuclear units in more than three decades. SO’s large load pipeline now exceeds 50 GW across its electric subsidiaries. Southern is ready to meet clean energy demand from data centers and industrial customers.
NRG’s Return on Equity Better Than Industry
Return on equity (ROE) is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. The current ROE of NRG Energy indicates that it is using shareholders’ funds more efficiently than peers in its industry..
Image Source: Zacks Investment Research
NRG Energy’s Shares Trading at a Premium
The company is currently valued at a premium compared with its industry on a forward 12-month P/E basis. NRG Energy is currently trading at 18.73X compared with the industry average of 15.17X.
Image Source: Zacks Investment Research
NRG Energy’s Earnings Estimates Moving North
The Zacks Consensus Estimate for NRG’s earnings per share indicates year-over-year increase of 9.64% and 20.33% in 2025 and 2026, respectively.
Image Source: Zacks Investment Research
NRG’s Zacks Rank
NRG Energy currently has a Zacks Rank#3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.