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NEE

NextEra Energy NYSE:NEE Stock Report

Last Price

US$88.92

Market Cap

US$174.7b

7D

3.8%

1Y

10.4%

Updated

09 Aug, 2022

Data

Company Financials +
NEE fundamental analysis
Snowflake Score
Valuation0/6
Future Growth2/6
Past Performance1/6
Financial Health0/6
Dividends3/6

NEE Stock Overview

NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America.

NextEra Energy, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for NextEra Energy
Historical stock prices
Current Share PriceUS$88.92
52 Week HighUS$93.73
52 Week LowUS$67.22
Beta0.47
1 Month Change10.80%
3 Month Change26.67%
1 Year Change10.42%
3 Year Change64.96%
5 Year Change138.63%
Change since IPO1,848.93%

Recent News & Updates

Aug 09

Conditions Favor NextEra Energy

NextEra Energy continues to trade at a premium valuation. The company's earnings are inflation-resistant. The Senate passage of the Inflation Reduction Act is a boost for NEE. The Wall Street consensus rating is bullish but suggests little potential for price appreciation. The market-implied outlook (calculated from options prices) continues to be bullish, albeit with fairly high volatility. The Senate's just-passed Inflation Reduction Act of 2022 provides significant incentives for utilities to expand green energy production. NextEra Energy (NEE), the largest producer of solar and wind energy in the world, stands to benefit. The bill also expands incentives for electric cars, increasing demand for electricity. The House of Representatives is expected to vote on the bill as soon as Friday. Along with the boost anticipated from the Inflation Reduction Act, high inflation is also positive for wind and solar energy assets because their cost of production is not impacted by high commodity prices. While NEE has rallied dramatically in the past 3 months, up 21.4%, the trailing 12-month return of 10.6%, lags those from utility index funds (XLU: 13.5%, IDU: 12.3%). Over the past 3-, 5-, 10- and 15-year periods, however, NEE has substantially outperformed. Rising interest rates are a greater concern for NEE than for the average utility because of NEE's richer valuation. NEE has a high forward P/E compared to other utilities, which means that the valuation is more dependent on growth assumptions. Rising interest rates increase the discount factor applied to future earnings, so that the fair value of NEE tends to decline more with rising rates than the average utility. Rising interest rates are also disproportionately costly for NEE because of the company's high variable rate debt load. Seeking Alpha 12-Month price history and basic statistics for NEE (Source: Seeking Alpha) NEE reported Q2 results on July 22nd, beating the consensus estimate for quarterly EPS by 10.4%. Over the past 4 years, NEE has beaten the consensus on EPS in all but 2 quarters. Both of the misses were very small. The consensus outlook for EPS growth is +9.7% per year over the next 3 to 5 years, considerably higher growth than is expected for the utility sector as a whole. This higher expected growth rate is largely priced into the shares, however. Etrade Trailing (4 years) and estimated future quarterly EPS for NEE. Green (red) values are amounts by which EPS beat (missed) the consensus estimated value (Source: ETrade) I last analyzed NEE on April 7th, about 4 months ago, at which time I maintained a buy rating on the shares. At that time, the major considerations were essentially the same as they are today, although the prospects of congress passing significant measures favoring clean energy looked dim. Even though the valuation was concerningly high, NEE appeared generally well-positioned. The Wall Street consensus rating was bullish, although the consensus 12-month price target implied a total return of 8.3%, less than half the annualized rate of return over the past 3-, 5-, and 10-year periods. The consensus view implied by options prices, the market-implied outlook, was bullish into early 2023. Since the publication of this post, NEE has substantially outperformed the broader market. Seeking Alpha Previous analysis of NEE and subsequent performance vs. the S&P 500 (Source: Seeking Alpha) For readers who are unfamiliar with the market-implied outlook, a brief explanation is needed. The price of an option on a stock is largely determined by the market's consensus estimate of the probability that the stock price will rise above (call option) or fall below (put option) a specific level (the option strike price) between now and when the option expires. By analyzing the prices of call and put options at a range of strike prices, all with the same expiration date, it is possible to calculate a probabilistic price forecast that reconciles the options prices. This is the market-implied outlook. For a deeper explanation and background, I recommend this monograph published by the CFA Institute. With the pending congressional vote on the Inflation Reduction Act of 2022, along with the substantial outperformance of NEE over the past 4 months, I am revisiting my position on NEE. I have calculated an updated market-implied outlook to January of 2023 and I have compared this with the current Wall Street consensus outlook, as in my previous analyses. Wall Street Consensus Outlook for NEE ETrade calculates the Wall Street consensus outlook for NEE using ratings and price targets from 11 ranked analysts who have published their views within the past 3 months. The consensus rating is bullish, as it has been for all of the past 12 months, and the consensus 12-month price target is 3.3% above the current share price. When you see a bullish rating with a price target that is not much above the current share price, this typically means that the share price has rallied in recent months, compressing the upside on the stock. This is the case for NEE, although it is also worth noting that the consensus 12-month price target has actually fallen in recent months. In my April analysis, ETrade calculated a 12-month consensus price target of $93.17. Of the 11 analyst views included in the consensus, only 1 has been updated since the Senate passed the Inflation Reduction Act and, as a result, do not reflect the improved outlook for government support of clean energy. ETrade Wall Street analyst consensus rating and 12-month price target for NEE (Source: ETrade) Seeking Alpha's version of the Wall Street consensus outlook is calculated using ratings and price targets from 20 analysts who have published opinions over the past 90 days. The consensus rating is bullish and the consensus 12-month price target is 2.22% above the current share price. Seeking Alpha Wall Street analyst consensus rating and 12-month price target for NEE (Source: Seeking Alpha) While the Wall Street analyst consensus rating continues to be bullish, the 21.4% gain in the shares over the past 3 months has reduced the potential price appreciation. The consensus price target (averaging the values from ETrade and Seeking Alpha) implies a total return of 4.6% over the next year. It is worth remembering, however, that the consensus calculated using analyst views from the past several months will, by definition, not be entirely responsive to the improved prospects for passage of the Inflation Reduction Act of 2022. Market-Implied Outlook for NEE I have calculated the market-implied outlook for NEE for the 5.4-month period from now until January 20, 2023, using the prices of call and put options that expire on this date. I analyzed this specific expiration date to provide a view through the end of 2022 and because these options are especially actively traded, as compared to other expiration dates. In addition, I created the market-implied outlook in April using this expiration date, which makes for an interesting comparison. The standard presentation of the market-implied outlook is a probability distribution of price return, with probability on the vertical axis and return on the horizontal. Geoff Considine Market-implied price return probabilities for NEE for the 5.4-month period from now until January 20, 2023 (Source: Author's calculations using options quotes from ETrade) At first glance, market-implied price return probabilities look quite symmetric, with comparable probabilities of positive and negative returns of the same magnitude. The peak in probability is very slightly tilted to favor negative returns. The expected volatility calculated from this outlook is 29% annualized, which is quite high for a utility. This reflects elevated uncertainties due to the high valuation, interest rates, and the potential upside from increased government support for wind and solar energy. The expected volatility from my April analysis was 27.7%. To make it easier to compare the relative probabilities of positive and negative returns, I rotate the negative return side of the distribution about the vertical axis (see chart below).

Jul 29

NextEra Energy declares $0.425 dividend

NextEra Energy (NYSE:NEE) declares $0.425/share quarterly dividend, in line with previous. Forward yield 2.01% Payable Sept. 15; for shareholders of record Aug. 30; ex-div Aug. 29. See NEE Dividend Scorecard, Yield Chart, & Dividend Growth.

Jul 25
NextEra Energy (NYSE:NEE) Has A Somewhat Strained Balance Sheet

NextEra Energy (NYSE:NEE) Has A Somewhat Strained Balance Sheet

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Jul 22

NextEra Energy Non-GAAP EPS of $0.81 beats by $0.05, revenue of $5.18B misses by $80M

NextEra Energy press release (NYSE:NEE): Q2 Non-GAAP EPS of $0.81 beats by $0.05. Revenue of $5.18B (+31.8% Y/Y) misses by $80M. Shares -1.6% PM. For FY2022, the company continues to expect adjusted EPS in the range of $2.80 to $2.90 vs. consensus of $2.86. For FY2023 and 2024, the company expects adjusted EPS in the ranges of $2.98 to $3.13 and $3.23 to $3.43, respectively. For FY2025, the company expects to grow 6% to 8% off the 2024 adjusted earnings per share expectations range, which translates to a range of $3.45 to $3.70 per share. The company also continues to expect to grow its dividends per share at an approximately 10% rate per year through at least 2024, off a 2022 base.

Shareholder Returns

NEEUS Electric UtilitiesUS Market
7D3.8%2.3%0.3%
1Y10.4%7.7%-13.5%

Return vs Industry: NEE exceeded the US Electric Utilities industry which returned 6.9% over the past year.

Return vs Market: NEE exceeded the US Market which returned -13% over the past year.

Price Volatility

Is NEE's price volatile compared to industry and market?
NEE volatility
NEE Average Weekly Movement4.3%
Electric Utilities Industry Average Movement3.4%
Market Average Movement7.9%
10% most volatile stocks in US Market17.2%
10% least volatile stocks in US Market3.2%

Stable Share Price: NEE is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NEE's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
192515,000John Ketchumhttps://www.nexteraenergy.com

NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal, and natural gas facilities. It also develops, constructs, and operates long-term contracted assets that consists of clean energy solutions, such as renewable generation facilities, battery storage projects, and electric transmission facilities; sells energy commodities; and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets.

NextEra Energy, Inc. Fundamentals Summary

How do NextEra Energy's earnings and revenue compare to its market cap?
NEE fundamental statistics
Market CapUS$174.71b
Earnings (TTM)US$2.58b
Revenue (TTM)US$17.49b

67.7x

P/E Ratio

10.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NEE income statement (TTM)
RevenueUS$17.49b
Cost of RevenueUS$9.51b
Gross ProfitUS$7.98b
Other ExpensesUS$5.40b
EarningsUS$2.58b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.31
Gross Margin45.63%
Net Profit Margin14.75%
Debt/Equity Ratio142.5%

How did NEE perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

123%

Payout Ratio

Does NEE pay a reliable dividends?

See NEE dividend history and benchmarks
When do you need to buy NEE by to receive an upcoming dividend?
NextEra Energy dividend dates
Ex Dividend DateAug 29 2022
Dividend Pay DateSep 15 2022
Days until Ex dividend19 days
Days until Dividend pay date36 days

Does NEE pay a reliable dividends?

See NEE dividend history and benchmarks