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NRG Energy, Inc. (NYSE:NRG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the current consensus from NRG Energy's five analysts is for revenues of US$28b in 2022 which - if met - would reflect a reasonable 6.2% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to nosedive 58% to US$7.14 in the same period. Before this latest update, the analysts had been forecasting revenues of US$26b and earnings per share (EPS) of US$7.11 in 2022. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that NRG Energy's revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2022 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.0% annually. So it's pretty clear that, while NRG Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at NRG Energy.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential concern with NRG Energy, including a weak balance sheet. You can learn more, and discover the 1 other concern we've identified, for free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.