Overview
Evercore ISI initiated coverage on NRG Energy Inc. (NYSE:NRG) with an outperform rating and set a price target of $215.00 on Wednesday. At the time of the firm’s note, the stock was trading at $184.03, close to its 52-week high of $184.84 and following an 82% gain over the prior 12 months.
Scale and recent acquisition
On a pro-forma basis after the recently closed purchase of an LS Power portfolio, NRG operates more than 32 gigawatts of generation and commercial virtual power plant capacity. Evercore ISI emphasized the company’s operating mix, noting that roughly 75% of those assets are natural gas-based and that NRG’s generation portfolio is 100% firm capacity.
Financial impact and valuation metrics
Evercore ISI said the LS Power acquisition will be immediately accretive to adjusted EBITDA, free cash flow and adjusted earnings per share. Market forecasts cited in the coverage note project earnings of $7.37 per share for fiscal 2026, which implies a PEG ratio of 0.46 based on those consensus estimates. A separate InvestingPro analysis referenced in the coverage shows NRG trading above its Fair Value, while assigning the company a financial health score of 3.22 out of 5 and labeling that score as "GREAT."
Sources of potential upside
Evercore ISI identified several near-term upside opportunities the firm believes could add value beyond current guidance. These include the potential to secure more than one gigawatt of data center retail agreements, ongoing execution of the company’s venture with GEV and Kiewit, and further gains from virtual power plant initiatives.
Vivent and margin stability
The research note highlighted NRG’s Vivent business as a contributor to recurring revenue stability. Vivent’s customer base has grown by 15% since the third quarter of 2023, and the business’s recurring service margin profile has expanded by 8% over the same interval. Evercore ISI said these trends have strengthened the stability of NRG’s margin and earnings profile.
Market structure changes and guidance caveat
Evercore ISI also pointed to the implementation of ERCOT’s Real-Time Co-optimization+Battery environment on December 5, 2025, saying the change has enhanced the value proposition for NRG’s virtual power plant capabilities. The note makes clear, however, that current company guidance does not assume additional upside from a potential data center deal or from further appreciation in wholesale power prices.
Recent quarterly results
In related corporate results, NRG reported fourth-quarter 2025 earnings that beat market expectations. The company posted earnings per share of $1.04 versus a consensus forecast of $1.02, and reported revenue of $6.86 billion compared with the anticipated $6.38 billion. Evercore ISI and the market reaction to these results reflect a positive reception, while commentary on stock moves emphasized that the primary focus remains on the quarterly financial performance.
Bottom line
Evercore ISI’s initiation frames NRG as a company with a larger asset base following the LS Power deal, multiple identified sources of incremental value and recent quarter-to-quarter improvement in core metrics. The firm’s price target and outperform rating reflect those factors, balanced against current valuation indications and the explicit exclusions noted in company guidance.