Strong cash generation from renewable integration is a key theme in the "NRG stock forecast 2025", which points to continued earnings expansion despite regulatory headwinds. Analysts monitor P/E levels around 7–8 as relatively attractive in the sector. Given the recent surge in their price, Campanella highlighted that investors should still buy stocks in utility and independent power-producing companies involved in nuclear power, citing the growing mismatch between supply and demand for power in the late decade. According to Campanella, utility companies that have nuclear assets are well-positioned to capitalize on this trend, particularly those with early site permits or Combined Operating Licenses. Campanella pointed out that the last nuclear renaissance had left several sites with existing permits, which could be leveraged to expedite the development of new nuclear facilities. He forecasts that additional large-scale and Small Modular Reactor (SMR) commitments will be made in 2025. The utility investors have had a strong 2024. Morningstar reported that utilities rose by 27%, including dividends, marking its best performance since 2000. The 2024 rally mitigated the 2023 woes, resulting in the fair valuation of utilities. Notably, the valuations fully showcase the AI-related energy demand growth potential. Even though utilities have outperformed the market in 2 of the last 3 years, the sector’s 7% average return since 2021 remains in line with the sector’s 40-year average. Corporate hedging strategies remain vital, and the "NRG stock forecast 2025" expects stable gross margin performance if hedges lock in favorable wholesale rates, reducing earnings volatility risk.
