Wells Fargo bullish on NRG Energy, initiates with an Overweight

As previously reported, Wells Fargo initiated coverage of NRG Energy with an Overweight rating and $65 price target. While not without risk, the firm is on board with NRG’s transition toward an energy services-centric strategy as it could result in a more durable EBITDA outlook with better growth prospects. Investors are highly skeptical of retail energy service businesses, but the landscape is rapidly changing and new value creating opportunities are emerging driven by technological innovation and power market disruption. In Wells’ view, NRG is well-positioned to capitalize on these trends given a leading retail energy platform and compelling technology solutions.