NRG Energy Stock Sinks on Earnings. Buy the Dip, Jefferies Says.

The energy trader and supplier reported a loss in the second quarter and announced its first data-center deals. (Daniel Acker/Bloomberg)

Shares of NRG Energy were falling sharply Wednesday after the energy trader and supplier reported a loss in the second quarter and announced its first data-center deals.

NRG posted a net loss of $104 million, or 62 cents a share, for the quarter. The result was primarily due to unrealized noncash losses on mark-to-market economic hedges driven by declines in forward natural gas and northeast power prices, as well as nonrecurring charges for “legal matters.”

Adjusted net income, which excludes those factors, totaled $339 million. That number was down from $353 million last year, but in line with analysts’ consensus estimates, according to FactSet.

The company reaffirmed its full-year guidance for adjusted earnings, and added that it was trending toward the upper end of its forecasts.

NRG stock was sinking 14% to $147.89 on Wednesday, putting it pace for the largest single-day percent decrease since 2022, according to Dow Jones Market Data.

Beyond the earnings print, NRG announced new long-term retail agreements to provide 295 megawatts of power for data centers on NRG sites, with a potential expansion of up to one gigawatt across additional sites. The company also raised the 2025 power target for its Texas Residential Virtual Power Plant to 150 megawatts from 20 megawatts.

Investors seemed to be expecting even bigger news from the data-center and virtual power-plant businesses, analysts at Jefferies said.

“Why are shares down sharply despite the positive update? Expectations were simply higher and the name is more crowded than we appreciated,” the Jefferies team wrote in a research note Wednesday.

NRG stock has more than doubled over the past 12 months, making it a crowded play for investors. But Jefferies counseled investors to buy the pullback after what it described as a positive print.

The firm has a Buy rating on the stock.

Write to Nate Wolf at nate.wolf@barrons.com