Mirant CorporationMIR

Morningstar Rating

Stock Research and Analysis

by Travis Miller

Although fundamental changes have improved the outlook for the merchant power industry since Mirant emerged from bankruptcy in 2006, we remain cautious about the company's ability to create long-term shareholder value, given its potential environmental Read more

Bulls Say

Recent asset sales concentrated Mirant's operations in four key metropolitan areas that have favorable supply-demand characteristics for existing power generators.

Mirant's mid-Atlantic coal plants are among the most efficient in the U.S. and generate more than 80% of its operating profits.

A new barge unloading station at Mirant's Morgantown facility will allow it to diversify its coal supply.

As of November 2009, a $1 per thousand cubic feet move in 2010 natural gas prices could lift operating earnings 10% in 2010. Read more

Bears Say

Environmental restrictions on greenhouse gases and water discharge are raising plant costs and lowering returns.

Natural gas prices, which fell from historically high levels mid-2008, brought electricity prices down with them.

Mirant's cash flows are directly tied to highly volatile commodity markets for electricity and fuels such as coal, natural gas, and oil.

Even given the recent revaluation, merchant power generation is extremely uncertain and cyclical and remains a risky industry. Read more

Strategy

Mirant remains one of the few pure-play merchant generators. After downsizing its operations and abandoning an ownership change, management refocused on its core business in four key metropolitan areas: Read more

Management

CEO and chairman Edward Muller started his second stint leading an independent power producer when he joined Mirant as it was heading out of bankruptcy in September 2005. Muller was CEO at Edison Mission Energy, Edison International's EIX merchant generator, Read more

Profile

Mirant is an independent power producer with 11 plants and 10,100 megawatts of domestic power generation capacity serving the mid-Atlantic and Northeast regions and California. Read more

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