Juno Beach, Florida-based NextEra Energy, Inc. (NEE) generates, transmits, distributes, and sells electric power to its retail and wholesale customers and operates multiple commercial nuclear power units. Valued at $161.05 billion by market cap, the leading clean energy company generates electricity through wind, solar, and natural gas projects. The company owns Florida Power & Light Company, America’s largest electric utility company that sells more power than any other utility, providing electricity to approximately 5.9 million customer accounts or more than 12 million people across Florida.
Shares of this energy giant have underperformed the broader market considerably over the past year. NEE has gained 9.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17.8%. However, in 2024, NEE stock is up 29.6%, surpassing the SPX’s 11.4% rise on a YTD basis.
Narrowing the focus, NEE’s underperformance looks less pronounced compared to the S&P 500 Utilities Sector SPDR (XLU). The exchange-traded fund has gained about 12% over the past year. However, NEE’s returns on a YTD basis outshine the ETF’s 17% returns over the same time frame.
NEE’s overall performance can be attributed to the growing demand for electricity. Electricity demand is forecasted to grow significantly in the upcoming years, with forecasters predicting demand to surge 38% by 2040. NEE is expected to play a key role due to the focus on energy produced through renewable sources. CEO John Ketchum expects demand for new renewables to triple over the next seven years. It has benefited from the replacement of coal-fired power plants with lower-carbon and lower-cost renewables.
The company has 300 gigawatts (GW) of projects in various stages of development and has added more than 3 GW of new renewables and storage projects, positioning it well for future growth.
On Jul. 24, NEE shares closed up more than 4% after reporting its Q2 results. Its adjusted EPS of $0.96 exceeded Wall Street expectations of $0.93. The company’s revenue of $6.07 billion fell short of Wall Street forecasts of $7.29 billion. Moreover, the company added more than 3,000 MWs of new renewables and storage projects to its backlog. NEE expects full-year adjusted EPS to be between $3.23 and $3.43.
For 2025, 2026, and 2027, the company expects adjusted EPS to be between $3.45 and $3.70, $3.63 and $4, and $3.85 and $4.32, respectively. It expects to grow its dividends per share at 10% year over year through at least 2026, off a 2024 base.
For the current fiscal year, ending in December, analysts expect NEE’s EPS to grow 6.9% to $3.39 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 17 analysts covering NEE stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” five “Holds,” and one “Strong Sell.”
This configuration is less bullish than three months ago, with 11 suggesting a “Strong Buy.”
Recently, Barclays analyst Nicholas Campanella maintained a “Hold” rating on NEE stock, with a price target of $75, implying a potential downside of 4.3% from current levels.
The mean price target of $79.47 represents only a 1.4% premium to NEE’s current price levels. The Street-high price target of $95 suggests an upside potential of 21.2%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
