Back to top

Image: Bigstock

NRG Energy (NRG) Q1 Earnings: Will the Stock Disappoint?

Read MoreHide Full Article

NRG Energy, Inc. (NRG - Free Report) is set to report first-quarter 2017 results before market open on May 2. The company posted a positive earnings surprise of 1,000% last quarter. Let’s see how things are shaping up for this announcement.

Factors to Consider

Much like the previous quarters, NRG Energy is expected to continue with its low-cost option growth strategy in the current quarter. This strategy helped the company to generate strong returns in a short time period.

President Donald Trump’s vow to revive the coal industry holds promise. If environmental regulations are relaxed to some extent, NRG Energy’s existing coal-fired generation units can continue to function longer than expected without any upgrade.

Additionally, the company’s cost-saving initiatives along with debt reduction in 2016 has already lowered the company’s interest burden.

Further plans of lowering debts in 2017 will strengthen the balance sheet and boost margins of the company.

Earnings Whispers

Our proven model does not conclusively show that NRG Energy is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: NRG Energy has an Earnings ESP of -186.67%. This is because the Most Accurate estimate stands at a loss of 43 cents while the Zacks Consensus Estimate is pegged at a loss of 15 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

NRG Energy, Inc. Price and EPS Surprise


Zacks Rank: Though the company’s Zacks Rank #2 increases the possibility of a beat, its negative ESP makes surprise prediction difficult.

Note that we caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider from the Utility - Electric Power Industry as our model shows that they have the right combination of elements to post an earnings beat this quarter.

NiSource, Inc (NI - Free Report) has an Earnings ESP of +3.08% and a Zacks Rank #2. It is slated to report first-quarter 2017 earnings on May 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dominion Resources, Inc. (D - Free Report) has an Earnings ESP of +2.15% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 4.

Pattern Energy Group Inc. has an Earnings ESP of + 300% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 8.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market.  See these critical buys and sells free >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

NiSource, Inc (NI) - free report >>

Dominion Energy Inc. (D) - free report >>

NRG Energy, Inc. (NRG) - free report >>

Published in