NRG Energy Beats by $1.33 as EPS Hits $4.68, Sells 4.9 GW for $4 Billion

NRG Energy posted $4.68 in third-quarter earnings per share on Monday, beating the consensus estimate of $3.35 by $1.33 and nearly matching the prior-year figure of $2.78 with a 24.0% revenue jump to $9.47 billion, against analysts' expectations of $8.42 billion. The utilities provider also announced a $4 billion asset sale to LS Power and lifted its share repurchase program by $1 billion. The stock rose 2.7% on the news.

How strong was the quarter?

The numbers came in strong across every headline metric. Net margin reached 3.60%, return on equity hit 53.20%, and revenue climbed 24.0% against the same quarter last year, when the firm earned $2.78 per share. On the conference call, management said all four key financial measures rose at least 50% year over year:

• Adjusted EBITDA of $2 billion
• Free cash flow before growth of $1.2 billion
• Adjusted EPS of $4.68

The takeaway: the quarter beat on both lines, and by a wide margin.

What does the LS Power deal change?

NRG agreed to sell six generation facilities totaling nearly 4.9 GW to LS Power for $4 billion, a price equal to eight times expected 2027 adjusted EBITDA. The company plans to deploy proceeds in three directions: $2 billion of debt reduction, an additional $1 billion of share repurchases, and $1 billion of cash flexibility. It retains its PJM portfolio, CPower, and substantial Texas generation.

Management also increased planned buybacks by $1 billion, bringing the 2026–2027 total to $3 billion, with incremental repurchases beginning in 2026. Their reasoning was direct: the shares are undervalued.

Where is guidance headed?

NRG reaffirmed its 2026 guidance and expects to finish slightly below the adjusted EBITDA midpoint, despite ERCOT prices averaging nearly 40% below its original planning assumption year to date. The company updated FY 2026 guidance to 7.900–9.900 EPS and FY 2027 guidance to 8.050–10.050 EPS.

The 2027 midpoint, excluding the asset sale, stands at $5.75 billion in adjusted EBITDA, $3.15 billion in free cash flow before growth, and $9.05 in adjusted EPS. That outlook absorbs $185 million of wholesale power price pressure and $100 million of RGGI compliance costs. Adjusted EPS growth is expected to be modest.

Management said the initial 1.2 GW Texas data center project remains on track, with a definitive agreement expected by year-end, and pointed to additional opportunities with the same customer. NRG reiterated its target of more than 14% annual growth in adjusted EPS and free cash flow before growth per share through 2030, excluding contributions from the project pipeline.

What did the market and analysts do?

NRG stock traded up $2.60 mid-day Wednesday, reaching $99.71 on volume of 965,589 shares versus an average of 2,868,169. The fifty-day simple moving average sits at $101.47; the 200-day at $133.18. The company carries a debt-to-equity ratio of 4.73, a quick ratio of 0.89, a current ratio of 0.99, a market capitalization of $21.04 billion, a price-to-earnings ratio of 17.55, and a beta of 1.22. The fifty-two week range runs from $79.65 to $189.96.

Brokerages responded with new targets:

• Jefferies Financial Group: $131.00, October 19th
• Raymond James Financial: $150.00 with a "strong-buy" rating, Tuesday
• Williams Trading: $165.00, October 21st
• Evercore: $195.00 with an "outperform" rating, August 5th
• Wells Fargo & Company: cut from $209.00 to $182.00, "overweight," October 28th

Two analysts rate the stock Strong Buy, eleven Buy, and four Hold, producing a MarketBeat consensus of "Moderate Buy" and an average target of $173.44.

What about the dividend and insider activity?

The board declared a quarterly dividend of $0.4750, payable Monday, November 16th to shareholders of record on the November 2nd ex-dividend date. Annualized, that is $1.90 per share, a yield of 1.9%, with a dividend payout ratio of 50.26%.

CAO Gerald Alfred Spencer sold 1,580 shares on Tuesday, September 8th at an average price of $120.93, totaling $191,069.40, under a pre-arranged Rule 10b5-1 plan. He retains 6,213 shares worth roughly $751,338.09 — a 20.27% reduction in his stake. Insiders own 0.43% of the company.