NRG Price Target Raised to $167 as LS Power Acquisition Enhances Growth Profile

BMO Capital analyst James Thalacker recently raised the price target on NRG Energy, Inc. (NYSE:NRG) to $167 from $115 and kept a Market Perform rating on the shares. NRG Energy, Inc. (NYSE:NRG) operates as an energy and home services company in the United States and Canada.

In an investor note, the analyst underlined that the company had announced the acquisition of a 12.9GW/6GW C&I VPP portfolio from privately held LS Power for $12.9 billion in cash, stock and assumed debt, and the advisory viewed the announcement positively given the company's enhanced business profile, visible EPS and free cash flow accretion. The acquisition of the LS Power portfolio is expected to deliver $1.6 billion of incremental adjusted EBITDA and $1 billion of free cash flow before growth, per NRG.

BMO added that a re-rating for NRG shares rested upon management's ability to demonstrate the revenue synergies between its traditional energy business and Vivint's higher margin and longer customer retention model.

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