UPDATE: Goldman Sachs Initiates Coverage on NRG Yield with Neutral Rating, $28 PT Following Outperformance

In a report published Monday, Goldman Sachs analyst Neil Mehta initiated coverage on

with a Neutral rating and $28.00 price target. In the report, Goldman Sachs noted, “We initiate coverage of NRG Yield (NYLD) with a Neutral rating and 12-month, $28 price target. While NYLD offers (1) strong dividend growth potential, (2) low risk assets, and (3) the financial/strategic support of NRG Energy – we see better risk/reward in other IPPs after NYLD's strong performance since the IPO. However, if NYLD were to acquire six identified drop-down assets from NRG Energy, NYLD could represent an above average total return proposition with a 4% dividend yield and a 15%-20% dividend CAGR through 2016.” NRG Yield closed on Friday at $28.37.