NRG
NRG Energy, Inc.
$107.97
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 77.0% above fair value
You pay
$107.97
Bear
$40.13
Fair
$61.01
Bull
$80.13
Bear
$40.13
-62.8%
4% stage 1 growth, 11% discount
Fair
$61.01
-43.5%
7% stage 1 growth, 11% discount
Bull
$80.13
-25.8%
10% stage 1 growth, 11% discount
Adjust Assumptions
7.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
25.4x
Market is pricing in (growth)
12.2%
vs 7.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$202.90
Divergence from AlphaVal
70%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $61.01 per share.
Warnings
Wall Street's average price target is $202.90 (from 27 analysts). Our estimate is 70% 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