NextEra Energy (NEE): Revisiting Valuation After a 14% One-Year Shareholder Return

NextEra Energy (NEE) has quietly outperformed over the past year, climbing about 14% while the broader utilities space has lagged. That steady move higher is making investors revisit its valuation.

See our latest analysis for NextEra Energy.

With the share price now around $81.27, NextEra’s 90 day share price return of 13.44 percent and 1 year total shareholder return of 14.45 percent suggest momentum is rebuilding as investors warm back up to quality renewables growth stories.

If NextEra’s steady climb has you rethinking the utilities space, it could be a good moment to see what else is working and explore fast growing stocks with high insider ownership.

But with shares still trading at a modest discount to analyst targets and growth regaining pace, is NextEra quietly undervalued right now, or has the market already priced in the next leg of its clean energy expansion?

Most Popular Narrative Narrative: 10.7% Undervalued

With NextEra Energy closing at $81.27 versus a narrative fair value of $91, the current setup suggests the story is still playing catch up.

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.

Read the complete narrative.

Want to see what kind of revenue surge and margin lift those advantages are meant to produce, and what future earnings multiple that assumes? The full narrative unpacks the growth runway, profitability targets, and valuation math that push this fair value above today’s price.

Result: Fair Value of $91 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on policy and execution, with tax credit phase downs and higher financing costs both capable of squeezing project returns and earnings power.

Find out about the key risks to this NextEra Energy narrative.

Another Angle on Valuation

That 10.7% upside from the narrative fair value clashes with what the price to earnings ratio is signaling. At 26 times earnings, NextEra trades richer than both the US electric utilities sector at 19.9 times and its peer group at 24.2 times, yet below a fair ratio of 29.7 times that the market could drift toward.

This places investors in a gray zone, where the stock appears expensive relative to today’s market and sector, but still has room to rerate if growth delivers. The key question is whether this represents a margin of safety or a margin of error.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own NextEra Energy Narrative

If this view does not fully line up with your own or you want to dive into the numbers yourself, you can quickly build a personalized take in just a few minutes, Do it your way.

A great starting point for your NextEra Energy research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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