Last Update 14 Dec 25

Fair value Increased 0.16%

NEE: Duane Arnold Nuclear Restart Will Drive Long Term AI Power Demand

Analysts have nudged their average price target on NextEra Energy slightly higher to approximately $91.14, reflecting continued confidence in the company’s above market revenue growth and resilient margins, despite mixed individual target revisions across the Street.

Analyst Commentary

Recent research updates on NextEra Energy highlight a generally constructive backdrop, with multiple upward price target revisions offset by a few modest trims. The Street sees a blend of solid growth prospects, supported by structural demand for clean power and data center load, alongside valuation and execution risks as the stock recovers.

Bullish Takeaways

Bullish analysts have raised price targets into the mid to high $80s and mid $90s, signaling rising conviction that the company can sustain premium growth and justify a higher valuation multiple over time.
Several reports point to durable earnings expansion driven by regulated rate base growth and renewables development, with some commentary suggesting an avenue for around high single digit growth to extend beyond 2030.
The Duane Arnold nuclear restart and long term power purchase commitments from hyperscalers are viewed as incremental value accretive, underscoring demand for zero carbon, baseload generation that supports NextEra’s long term growth narrative.
Sector level views that integrated utilities with constructive regulation will benefit most from the current cycle in grid upgrades and new generation capacity place NextEra among favored names for capturing elevated power demand.

Bearish Takeaways

Bearish analysts have trimmed price targets at the margin, arguing that after the recent share price rally, much of NextEra’s above market growth profile is now appropriately reflected in the valuation.
Some commentary highlights that extending high single digit growth beyond the next decade could require taking on above average project and regulatory risk for only modest incremental upside, raising questions about the risk reward balance.
With Q3 expectations already well telegraphed, a lack of major strategic updates or surprises at upcoming investor events could limit near term catalysts, leaving the stock more sensitive to sector sentiment and rate moves.
Updates to broader utilities coverage emphasize that the group has recently lagged broader equity benchmarks, and any renewed underperformance or macro pressure on interest rate sensitive sectors could weigh on NextEra’s multiple despite its strong fundamentals.

What’s in the News

Google and NextEra Energy are partnering to restart the 615 MW Duane Arnold nuclear plant in Iowa by 2029 to supply 24/7 carbon free power for Google’s AI and cloud operations, supporting more than 1,600 construction related jobs and hundreds of permanent roles (Fox Business).
NextEra Energy and Google Cloud expanded their strategic alliance to co develop multiple gigawatt scale data center campuses across the U.S. and deploy Google Cloud AI tools to optimize grid reliability, field operations and system planning, with a first commercial product targeted for mid 2026.
NextEra Energy announced long term power purchase agreements and ownership changes tied to the Duane Arnold restart, including a 25 year carbon free supply contract for Google and plans to acquire remaining minority stakes to bring plant ownership to 100 percent, while Iowa customers avoid costs tied to Google’s offtake.
The U.S. Nuclear Regulatory Commission granted subsequent license renewals for NextEra Energy’s Point Beach Units 1 and 2 in Wisconsin, extending operations through 2050 and 2053 and securing a key source of baseload, low carbon power for roughly 1 million customers.
Amid a federal “kill list” under consideration that could cancel an additional $12 billion in clean energy funding, NextEra Energy is cited among the companies potentially affected by shifting U.S. policy toward renewables and grid scale projects (Semafor).

Valuation Changes

Fair Value: nudged slightly higher from $91.00 to about $91.14 per share, reflecting a modest uptick in modeled upside.
Discount Rate: effectively unchanged, edging down marginally from 6.956 percent to 6.956 percent, signaling a stable risk assessment.
Revenue Growth: risen modestly from approximately 11.36 percent to about 11.69 percent, indicating slightly stronger long term top line expectations.
Net Profit Margin: improved slightly from roughly 26.66 percent to about 26.80 percent, supporting a marginally more constructive view on profitability.
Future P/E: decreased modestly from about 24.85x to roughly 24.54x, suggesting a small compression in the forward valuation multiple despite the higher fair value estimate.

Surging demand for electricity and advantages in renewables position NextEra for strong revenue growth and margin expansion over competitors.
Legislative support, project backlog, and regulated utility investments ensure stability, predictable earnings, and sustainable long-term growth.
Phasedown of incentives, rising financing costs, regulatory hurdles, modest utility earnings growth, and decentralized competition threaten NextEra's long-term revenue, margin, and market position.

Catalysts

About NextEra Energy

Through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America.What are the underlying business or industry changes driving this perspective?

Accelerating and sustained demand growth for electricity-driven by AI, data center expansion, and electrification of sectors like transportation and heating-positions NextEra to grow volumes and capture higher average revenue per MWh as utilities compete to provide essential infrastructure for hyperscalers and traditional customers. This is expected to support robust revenue growth.
Declining costs and rapid deployment timelines of renewables (solar, wind, and especially battery storage), along with NextEra's unrivaled supply chain and perpetual construction capabilities, allow the company to extract significant pricing and operational advantages over competitors, helping to expand margins and accelerate earnings as cost pressures mount elsewhere in the sector.
Recently enacted federal legislation (OBBB) and safe harbor provisions provide multi-year tax and regulatory visibility through at least 2029 for wind, solar, and storage projects, which, combined with a large existing project backlog and strong balance sheet, allow NextEra to secure project returns, support dividend growth, and maintain healthy net margins despite broader policy uncertainty.
NextEra's scale and ongoing capital investment in regulated utility operations (Florida Power & Light)-supported by Florida's constructive regulatory environment-are set to drive a larger, more predictable rate base and consistent earnings streams, with relatively stable and above-average returns on equity adding stability to net income.
Strategic bets in energy storage, grid modernization, and nuclear/SMR development, amid growing national focus on grid reliability and extreme weather resilience, create high-margin growth avenues and help the company offset the eventual phase-out of renewable tax credits-supporting the sustainability of long-term earnings and cash flow growth.

NextEra Energy Earnings and Revenue Growth

NextEra Energy Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming NextEra Energy's revenue will grow by 11.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 22.9% today to 26.3% in 3 years time.
Analysts expect earnings to reach $9.4 billion (and earnings per share of $4.37) by about September 2028, up from $5.9 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.9x on those 2028 earnings, down from 24.4x today. This future PE is greater than the current PE for the US Electric Utilities industry at 19.9x.
Analysts expect the number of shares outstanding to grow by 0.14% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

NextEra Energy Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Phasedown of wind and solar tax credits under the One Big Beautiful Bill Act, combined with policy uncertainty from executive orders and potential future regulatory changes, could reduce the long-term availability of key financial incentives for NextEra's renewables, potentially impacting future project economics, revenue growth, and net margins.
Heightened interest rates and higher project financing costs were noted as increasing; if these persist or worsen, they could squeeze returns on capital-intensive infrastructure, drive up interest expenses (as seen in the recent $0.06 per share hit), and lower net income, especially given sustained high levels of planned capital investment.
Increasing regulatory and permitting challenges at the federal level-such as new Department of Interior review layers and evolving federal permitting priorities-noted in relation to siting renewables and potential exposure on federal lands, may delay or raise costs to bring projects online, slowing revenue realization and constraining growth.
Evidence of only modest EPS growth at regulated utility Florida Power & Light (FPL) despite high capital employed (earnings grew <3.5% while capital employed grew ~8%), suggests that regulated returns are flattening, and further rate case or regulatory setbacks could pressure future earnings stability for this substantial NextEra subsidiary.
The potential for greater competition and decentralized power-such as increased distributed energy resources (e.g., rooftop solar) and smaller developers exiting the market as incentives phase down-could eventually erode NextEra's market share and pricing power, especially into and beyond 2029, with long-term consequences for revenue and margin growth in both regulated and competitive businesses.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $82.294 for NextEra Energy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $103.0, and the most bearish reporting a price target of just $52.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $35.9 billion, earnings will come to $9.4 billion, and it would be trading on a PE ratio of 21.9x, assuming you use a discount rate of 6.8%.
Given the current share price of $70.07, the analyst price target of $82.29 is 14.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

NEE: Long-Term Clean Energy Demand Will Drive Future Performance