NRG
NRG Energy, Inc.
$137.65
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 155.9% above fair value
You pay
$137.65
Bear
$0.00
Fair
$53.79
Bull
$138.97
Bear
$0.00
-100.0%
5% stage 1 growth, 12% discount
Fair
$53.79
-60.9%
9% stage 1 growth, 12% discount
Bull
$138.97
+1.0%
11% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
33%
Implied Market Multiple
58.4x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $194.50 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $53.79 per share.
Warnings
Wall Street's average price target is $194.50 (from 26 analysts). Our estimate is 96% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions