NRG Energy stock up 6% after inclusion to Goldman's 'Conviction Buy List'

NRG Energy Inc (NYSE: NRG) jumped 6% in the stock market on Monday morning as Goldman Sachs added it to its Conviction List. The power provider’s Q1 results took a significant hit due to the recent winter storm, but Goldman Sachs now expects it to recover in the upcoming weeks.

NRG has underperformed the Utilities Select Sector SPDR Fund

According to Goldman Sachs’ Michael Lapides:

For the next two years, the analyst expects $1.6 billion to $1.9 billion of free cash flow for NRG Energy with a multiple of net debt to EBITDA of under 2.75 times. In the first half, the Utilities Select Sector SPDR Fund (XLU) significantly outperformed the American energy company.

Joe Terranova’s comments on the Goldman Sachs call

NRG’s performance improved in May, but it is still down 1% compared to the XLU on a year-to-date basis. Commenting on Goldman Sachs’ call, Joe Terranova of Virtus Investment Partners said on CNBC’s “Halftime Report:

NRG is now more than 10% up in the stock market this year.