U.S. Markets closed

NRG Energy (NRG) Gains But Lags Market: What You Should Know

Zacks Equity Research

NRG Energy (NRG) closed at $39.38 in the latest trading session, marking a +0.66% move from the prior day. This move lagged the S&P 500's daily gain of 1%.

Prior to today's trading, shares of the power company had gained 0.23% over the past month. This has lagged the Utilities sector's gain of 0.73% and outpaced the S&P 500's loss of 1.22% in that time.

Investors will be hoping for strength from NRG as it approaches its next earnings release. In that report, analysts expect NRG to post earnings of $2.17 per share. This would mark year-over-year growth of 130.85%.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.89 per share and revenue of $9.36 billion. These totals would mark changes of +61.41% and -10%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for NRG. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. NRG currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that NRG has a Forward P/E ratio of 10.06 right now. This represents a discount compared to its industry's average Forward P/E of 21.01.

Also, we should mention that NRG has a PEG ratio of 0.28. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Utility - Electric Power was holding an average PEG ratio of 3.89 at yesterday's closing price.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
To read this article on Zacks.com click here.