The investment firm expects the Princeton, N.J., company to return to more normal operating conditions after a recent winter storm significantly weighed on first-quarter results.
"We revise our forecasts to reflect other key takeaways such as higher customer growth as NRG expects to grow its retail customer presence and margin, as well as lower operating expense growth," analyst Michael Lapides said.
NRG Energy shares at last check were rising 3.1% to $39.70.
Lapides forecasts free cash flow between $1.6 billion and $1.9 billion in 2022 and 2023. He also expects NRG's multiple of net debt to earnings before interest, taxes, depreciation and amortization to remain below 2.75 times over that period.
Goldman forecasts NRG buys back just under 25% of the current market capitalization from 2021 to 2023.
Lapides notes that NRG materially underperformed the Utilities Select Sector SPDR Fund (XLU) - Get Utilities Select Sector SPDR Fund Report in the first half, though its performance improved in the past month. Year to date, NRG trails the XLU by 1%.
"With recent legislation passed in Texas that enables the state and Ercot' -- the operator of the state's' electrical grid -- "to fund the defaults from various other parties, plus a return to far more normal operating conditions vs the abnormal February 2021, NRG’s cash flow should improve," Lapides said.