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NRG Energy (NRG) Hits 52 Week High on Transformation Plans

NRG Energy, Inc. NRG hit a new 52-week high of $24.12 on July 19, before closing at $24.00. The stock has registered a one-year return of about 64.7%.

Over the past 52 weeks, NRG Energy’s share price has ranged from a low of $9.84 to a high of $24.12. Average volume of shares traded over the last three months is approximately 6.83 million.

Why is NRG Energy Moving Up?

NRG Energy has been delivered an average surprise of 193.74% in the last four quarters. The company's second-quarter 2017 Zacks Consensus Estimate has moved up by 34.8% in the last 60 days.

Recently, the company announced its ambitious transformation plan, per which it aims to save nearly $1.065 billion through recurring cost cuts and margin improvements. The plan also calls for divestment of assets in the range of $2.5–$4 billion. Usage of the net proceeds will strengthen its balance sheet through repayment of a debt of $13 billion.

The primary objective of this initiative is to strengthen the balance sheet of the company from the current levels and create value for the shareholders. NRG Energy aims to utilize this excess cash in projects that will generate an unlevered pre-tax return in the range of 12-15%.

With an aim to reduce the green house gas emission, the utility service providers like NRG Energy, Dominion Energy Inc. D, Duke Energy DUK and Xcel Energy Inc. XEL among others, have taken multiple initiatives in the last few years. Though the stringent emission regulations are being relaxed by the present government, the companies have not taken their focus off from increasing the renewable portfolio.  

Price Movement

In the one year, shares of NRG Energy have returned 64.7% compared with the Utility Electric Power industry’s loss of 2.1%.

The company, with its cost-savings initiatives, expansion of renewable portfolio and latest transformation plan, is geared up for further growth from the present levels.

Zacks Rank

NRG Energy currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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