NRG Energy Inc

Equity Research 4 August 2026 | 10:26PM EDT

NRG Energy Inc. (NRG) Reaction to Texas directive appears overdone given NRG strategy favors BYOP and BTM optionality; Buy

NRG 12m Price Target: $169.00 Price: $117.04 Upside: 44.4% BUY Carly Davenport We update estimates for NRG Energy (NRG, Buy) following 2Q26 | Goldman Sachs & Co. LLC earnings. While the stock fell 15% following the conference call, Beatriz Abreu, CFA mostly driven by the Texas Governor’s August 3 directive ordering | Goldman Sachs & Co. LLC an audit of data center interconnection requests and pausing ERCOT’s Batch Zero process, we believe this market reaction is Jaya Patel | Goldman Sachs & Co. LLC overdone. First, the proposed 1.2GW data center opportunity is not targeted for COD until late-2029, providing ample runway to navigate regulatory updates. Second, management highlighted the Key Data _____________________________________ Market cap: $23.3bn flexibility to operate the facility in behind-the-meter or island mode Enterprise value: $45.1bn 3m ADTV: $386.2mn if grid interconnection faces delays. Third, NRG’s BYOP model aligns United States with past Governor directives of grid reliability, affordability, and Americas Utilities M&A Rank: 3 community protection by matching new demand with new GS Forecast __________________________________ generation and ensuring the customer fully funds the infrastructure. 12/25 12/26E 12/27E 12/28E

While near-term headwinds from softer ERCOT load and prices have Revenue ($ mn) New Revenue ($ mn) Old 30,707.0 30,707.0 32,783.6 31,021.0 29,135.3 29,130.4 30,055.5 30,218.4 NRG tracking below the midpoint of its 2026 guidance, we do not EBITDA ($ mn) 4,087.0 5,530.5 6,051.0 6,427.7 EBIT ($ mn) 2,681.0 3,645.7 4,224.0 4,521.8 view this as structural, with the company reaffirming its full-year EPS ($) New ranges and capital allocation framework. We reiterate our Buy rating EPS ($) Old P/E (X) on NRG, as we believe the core business fundamentals remain intact Dividend yield (%) 1.3 1.7 1.8 2.0 and the BYOP pipeline represents earnings upside if materialized. Net debt/EBITDA (X) 2.8 3.8 3.4 3.1

We update our estimates following results and our price target 6/26 9/26E 12/26E 3/27E moves to $169 implying 46% total return. EPS ($)

GS Factor Profile ______________________________ Bring Your Own Power (BYOP) opportunity announcement Growth

aligned with the 2026 1GW large load target. NRG announced Financial Returns principal commercial terms with a leading global cloud and AI Multiple hyperscaler to build a 1.2 GW CCGT plant in Texas to support a 1 GW data center load, with potential expansion up to 2.4 GW. Integrated

According to NRG, the customer has made a financial commitment, Percentile 20th 40th 60th 80th 100th but the deal remains subject to ongoing negotiations, land related matters, and required internal approvals. NRG plans to develop, NRG relative to Americas Coverage NRG relative to Americas Utilities own, and operate the plant, supported by the turbine and EPC capacity previously secured through GE Vernova and Kiewit. The Source: Company data, Goldman Sachs Research estimates. See disclosures for details. project targets a late 2029 COD, a 12-15% pre-tax unlevered IRR range, at least $500 mn of annual EBITDA, and ~$375 mn of annual

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Goldman Sachs NRG Energy Inc. (NRG)

NRG Energy Inc. (NRG) Balance Sheet ($ mn) _______________________________________ BUY Rating since Mar 6, 2026 12/25 12/26E 12/27E 12/28E Cash & cash equivalents 4,998.0 1,440.5 1,145.2 1,487.3 Accounts receivable 4,065.0 3,534.0 3,534.0 3,534.0 Inventory Ratios & Valuation __________________________________________ Other current assets…