DCF Studio

    NRG · NYQ · Utilities

    NRG Energy, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 56.23

    Market price

    USD 94.62

    Implied upside

    -40.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 56.23-40.6%
    Exit multiple
    USD 84.76-10.4%
    Market price
    USD 94.62

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 35.3bnUSD 36.0bnUSD 36.8bnUSD 37.6bnUSD 38.4bnUSD 39.3bnUSD 40.2bnUSD 41.2bnUSD 42.2bnUSD 43.2bn+2.3%
    EBITUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 1.9bn+2.3%
    NOPATUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.5bn+2.3%
    Add depreciation & amortisationUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bn+2.3%
    Less capital expenditureUSD -778.6mUSD -860.9mUSD -946.7mUSD -1.0bnUSD -1.1bnUSD -1.2bnUSD -1.3bnUSD -1.4bnUSD -1.6bnUSD -1.7bn+8.8%
    Capex, % of revenue2.2%2.4%2.6%2.8%2.9%3.1%3.3%3.5%3.7%3.9%-
    Less increase in working capitalUSD -263.7mUSD -41.4mUSD -43.4mUSD -45.6mUSD -47.8mUSD -50.1mUSD -52.5mUSD -55.0mUSD -57.7mUSD -60.5m-15.1%
    Free cashflow to firmUSD 1.3bnUSD 1.5bnUSD 1.5bnUSD 1.5bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.3bnUSD 1.2bnUSD 1.2bn-1.3%
    Discount factor0.96480.89790.83580.77790.72400.67390.62720.58380.54340.5057-
    Present valueUSD 1.3bnUSD 1.4bnUSD 1.3bnUSD 1.1bnUSD 1.0bnUSD 931.3mUSD 839.8mUSD 755.2mUSD 677.2mUSD 605.1m-
    Present Value Of The ForecastUSD 9.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.135Reported 1.201, pulled toward 1.0 (Blume)
    Cost of equity9.69%Risk-free + beta x equity risk premium
    Cost of debt6.00%Risk-free + 111bp, the spread for a BBB rating at 2.6x interest cover. Book interest / average debt was lower, at 5.4%.
    Market capitalisationUSD 19.9bn54.5% of capital
    Total debtUSD 16.6bn45.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.44%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 56.23

    57% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.5bn
    Less reinvestment at g/ROIC (17.5% of NOPAT)
    USD -267.1m
    Capitalised
    USD 1.3bn
    ROIC (reported)
    14.3%
    Terminal value, undiscounted
    USD 26.1bn
    Terminal value, discounted
    USD 13.2bn
    Enterprise value
    USD 23.1bn
    Less net debt
    USD 11.9bn
    Equity value
    USD 11.2bn

    Exit at 11.2x EBITDA

    Value per shareUSD 84.76

    66% of EV

    Terminal value, undiscounted
    USD 37.3bn
    Terminal value, discounted
    USD 18.9bn
    Enterprise value
    USD 28.8bn
    Less net debt
    USD 11.9bn
    Equity value
    USD 16.9bn

    Spread between methods: 40%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.44%102.66113.09127.31147.64178.83
    6.44%71.4776.4282.8191.25102.80
    7.44%50.7253.1656.2360.1265.18
    8.44%35.9137.0638.5140.3442.65
    9.44%24.8025.2425.8426.6127.61

    Outlined: this model. Green text: above today's price of 94.62. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-0.9%3.5%7.2%
    EBIT margin8.1%4.5%6.0%
    Discount rate-7.4%6.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.