Deutsche Bank Upgrades NRG Energy To Hold From Sell

In a report released this morning, Deutsche Bank said that it has upgraded NRG Energy, Inc. (NYSE: NRG) to Hold from Sell with the stock having dropped ~8% and lagged the market and IPP peers since mid-September (S&P 500 up 8%).

“Our key catalyst of weak initial '11 guidance has also now passed,” Deutsche Bank writes. “While we are moving to Hold we remain cautious given a weak outlook driven by hedge roll-offs, continued overhang from the STP nuclear project, and a fundamental valuation of $19/sh or modestly below the current price.”

Deutsche Bank said that it has not found further downside potential to be enough, and see upside risk if gas rebounds and/or STP is cancelled.

NRG Energy currently trades at $19.93.