NRG Energy (NRG) Laps the Stock Market: Here's Why

In the latest close session, NRG Energy (NRG) was up +2.57% at $149.90. The stock's change was more than the S&P 500's daily gain of 0.72%. On the other hand, the Dow registered a gain of 0.48%, and the technology-centric Nasdaq increased by 1.16%.

Shares of the power company witnessed a loss of 9.82% over the previous month, trailing the performance of the Utilities sector with its loss of 3.26%, and the S&P 500's loss of 4.99%.

The investment community will be paying close attention to the earnings performance of NRG Energy in its upcoming release. In that report, analysts expect NRG Energy to post earnings of $1.63 per share. This would mark a year-over-year decline of 37.79%. Our most recent consensus estimate is calling for quarterly revenue of $10.87 billion, up 26.66% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $8.83 per share and revenue of $36.24 billion, which would represent changes of +9.42% and +18%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for NRG Energy. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 3.89% downward. Currently, NRG Energy is carrying a Zacks Rank of #3 (Hold).

With respect to valuation, NRG Energy is currently being traded at a Forward P/E ratio of 16.55. This represents a discount compared to its industry average Forward P/E of 18.59.

The Utility - Electric Power industry is part of the Utilities sector. Currently, this industry holds a Zacks Industry Rank of 79, positioning it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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