NRG
NRG Energy, Inc.
$129.11
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 125.8% above fair value
You pay
$129.11
Bear
$0.00
Fair
$57.17
Bull
$114.18
Bear
$0.00
-100.0%
5% stage 1 growth, 11% discount
Fair
$57.17
-55.7%
8% stage 1 growth, 11% discount
Bull
$114.18
-11.6%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
55.7x
Market is pricing in (growth)
22.6%
vs 7.8% base
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 $196.00 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $57.17 per share.
Warnings
Wall Street's average price target is $196.00 (from 27 analysts). Our estimate is 94% 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