UPDATE: Citigroup Upgrades GenOn to Buy Following Merger Proposal
Citigroup raised its rating on GenOn Energy (NYSE: GEN) from Neutral to Buy and raised its price target from $2.90 to $3.15.
Citigroup noted, "Since announcing the proposed merger between NRG and GenOn on 7/22, we have valued shares of GEN as a function of NRG's target price given that we see very limited risk during the regulatory approval process. This has been confirmed during the past few months, with only FERC and NYPSC approvals remaining. … The product of our $26 NRG target and the proposed exchange ratio of 0.1216x yields a rounded $3.15 implied target price for GEN, warranting a Buy (1) rating at these levels."
GenOn Energy closed at $2.54 on Friday.
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