UBS: NRG Energy, Inc. (NRG) is a Buy on Compelling free Cash Flow, Strategic Positioning, and Differentiated Growth Drivers

NRG Energy Inc. (NYSE:NRG) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 9, UBS initiated coverage of NRG Energy Inc. (NYSE:NRG) with a Buy rating and a $211 price target. The research firm remains confident about the company’s prospects owing to its compelling free cash flow, strategic positioning, and differentiated growth drivers.

The company already offers a 9% pro forma free cash flow yield, which is one of the most attractive compared to 7% average yield in the Independent power producer sector. In November, the company secured approval from the Federal Energy Regulatory Commission (FERC) and the New York State Public Service Commission (NYSPSC) for the acquisition of a portfolio of natural gas generation facilities from LS Power. The acquisition extends the company’s ability to deliver innovative, customized energy solutions.

Likewise, the research firm noted that the company’s upside potential is not solely tied to data center operations but also includes exposure to retail offerings, new-generation development opportunities, and smart Home initiatives. Consequently, UBS sees a 27% upside potential on NRG shares given the company’s scale, retail integration, and multiple growth drivers.

Meanwhile, Raymond James has reiterated that NRG Energy is one of the stocks to watch in the current market. The research firm has a $223 price target on the stock and views it as a buy following the recent 13% to 14% sell-off.

NRG Energy, Inc. (NYSE:NRG) is a major integrated U.S. energy company that generates, sells, and delivers electricity and natural gas to homes and businesses, offering diverse power sources (coal, gas, renewables) and expanding into smart home/energy solutions through acquisitions such as Vivint.

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Disclosure: None. This article is originally published at Insider Monkey.