NRG Energy Inc: Earnings Takeaways

Research evidence excerpt

M

Update

August 5, 2026 04:01 AM GMT

Morgan Stanley & Co. LLC

NRG Energy Inc | North America

David Arcaro, CFA

Equity Analyst

Earnings Takeaways

Alexandre Zimmermann

Research Associate

Zhizhong Dong

AlphaSignals Earnings Reaction

Research Associate

Unchanged

Modest shortfall

Modest revision lower

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Amanda Huang

Source: Company data, Morgan Stanley Research

Research Associate

Jeremy Herring

NRG (EW) – 2Q in-line, full year now indicated below midpoint. Data center deal

progressing but not yet final

NRG stock declined 15% yesterday, we believe attributable to elevated expectations

with investors expecting a finalized contract announcement in the quarter and some

disappointed with the implied returns indicated by management and lack of clarity

on timing of finalizing the deal. We came away encouraged by the progress and the

economic terms appeared to be in-line with our expectations and prior messaging

(Expect to contract at least 1 GW in 2026, prices >$80/MWh, and unlevered returns

Research Associate

NRG Energy Inc (NRG.N, NRG UN)

Diversified Utilities / IPPs | United States of America

Stock Rating

Industry View

Price target

Shr price, close (Aug 4, 2026)

Mkt cap, curr (mm)

52-Week Range

Equal-weight

Attractive

$165.00

$117.04

$25,022

$189.42-112.50

in the 12-15% range - All consistent with yesterday's discussion).

Financial results: Adj. EBITDA $1,217m, in-line with cons. of $1,218m (MS: $1,228m).

The company reiterated all of its financial targets for 2026 but indicated that based

on the current outlook it was likely to be below the midpoint given weak ERCOT

prices, RGGI costs, and winter storm Fern related costs.

Advancing a data center deal:

• Not contracted yet - Aligned on principal commercial terms subject to final

negotiation, though not specific on timing of when this would conclude

• 1.2 GW project for a hyperscaler, 15yr term, potential to expand to 2.4 GW,

COD in late 2029, implied pricing in the $85-90/MWh range

• $3.2b investment yielding $500m EBITDA run rate, $375m FCF, unlevered

IRR in the 12-15% range

…