BMO raises NRG Energy stock price target to $115

On Monday, BMO Capital Markets adjusted its outlook on NRG Energy (NYSE:NRG) shares, raising the price target to $115 from the previous $100 while maintaining a Market Perform rating. The adjustment follows NRG’s robust financial results, where the company’s fourth-quarter and full-year 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3.49 billion surpassed both BMO’s and consensus estimates, as well as the upper limit of the company’s own revised guidance. According to InvestingPro analysis, NRG currently appears undervalued based on its Fair Value estimates.

NRG Energy’s financial performance demonstrated significant growth, with full-year 2025 earnings per share (EPS) coming in approximately 8% higher than the midpoint of the company’s raised guidance. The stock has delivered impressive returns, surging 90% over the past year and 33.7% in the last six months. The EPS saw a 45% year-over-year increase, which was attributed to strong demand, favorable market conditions, and a reevaluation of amortization costs related to customer acquisition at Vivint. InvestingPro subscribers have access to 8 additional key insights about NRG’s performance and outlook.

The analysts at BMO Capital noted that despite the strong results, they would continue to rate NRG Energy as Market Perform. However, they acknowledged the company’s positive financial trajectory, with management reaffirming its 2025 financial outlook and long-term projections. Specifically, NRG Energy is expected to achieve a greater than 10% compound annual growth rate (CAGR) in Base Adjusted EPS through 2029.

The raised price target to $115 is based on a mark-to-market (MTM) and sum-of-the-parts (SOTP) valuation approach, reflecting the optimism surrounding NRG’s higher financial outlook. The company’s recent performance and future guidance suggest that it is well-positioned to maintain a strong presence in the energy sector moving forward.

In other recent news, NRG Energy reported its fourth-quarter 2024 earnings, revealing an impressive earnings per share (EPS) of $1.56, which significantly exceeded the forecast of $1.08. However, the company reported revenues of $6.86 billion, falling short of the expected $7.36 billion. Guggenheim Securities has raised its price target for NRG Energy to $145, maintaining a Buy rating, reflecting confidence in the company’s strategic direction and growth prospects. Guggenheim’s analyst Shahriar Pourreza highlighted NRG’s focus on developing new projects with long-term contracts as a way to mitigate policy risks in the energy market.

NRG Energy also announced a strategic collaboration with GE Vernova and Kiewit to accelerate new natural gas generation development, aiming to bring 1.2 gigawatts of new capacity online by 2029. The company has secured two slot reservation agreements for gas turbines, indicating robust future capacity growth. Additionally, NRG Energy’s adjusted EBITDA increased by $470 million year-over-year to $3.8 billion, and the company returned $1.3 billion to shareholders in 2024. These recent developments underscore NRG Energy’s commitment to strategic growth and shareholder value amidst evolving energy market dynamics.

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