Maintaining Buy on NextEra Energy: Strategic Growth and Solid Fundamentals Justify Premium Valuation

BMO Capital analyst James Thalacker maintained a Buy rating on NextEra Energy (NEE – Research Report) yesterday and set a price target of $68.00.

James Thalacker has given his Buy rating due to a combination of factors, including the comparative advantage of NextEra Energy’s (NEE) upcoming quarterly earnings estimate over consensus estimates, and the company’s strategic positioning in the market. Thalacker anticipates a modestly negative year-over-year comparison for the first quarter of 2024, primarily due to higher interest expenses and dilution within the Corporate & Other segment. However, he maintains an optimistic outlook, as this is counterbalanced by the growth at Florida Power & Light (FPL) and a favorable comparison to the current consensus estimate. Despite a reduction in the target price to $68, the adjustments reflect a mark-to-market on peer group multiples and an updated segment net debt outlook within a sum-of-the-parts valuation framework.
Moreover, Thalacker underscores NextEra Energy’s robust industry standing and premium valuation, which he believes are justified by the company’s fundamental and thematic strengths. These include a substantial renewable energy and storage backlog and the ability to recoup investments effectively through regulatory frameworks. The focus areas he identifies for investors include the company’s backlog developments, particularly in response to the rising demand for carbon-free energy, potential insights from the upcoming Analyst Day, implications of trade policies, and the financing strategies to address higher interest rates. Thalacker’s unchanged earnings per share (EPS) estimates for the years 2024 through 2026 further cement his confidence in NextEra Energy’s enduring financial performance.

In another report released on April 5, DBS also maintained a Buy rating on the stock with a $75.00 price target.

TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.

NextEra Energy (NEE) Company Description:

NextEra Energy, Inc. is an energy company and is one of the largest electric power generators in the United States. Through its Florida Power & Light Company (FPL) business, the company provides clean, reliable and affordable electricity across Florida. NextEra Energy also owns a clean energy business, NextEra Energy Resources (NEER), which is the world’s largest generator of renewable energy from wind and sun. The company was founded in 1984 and based in Juno Beach, Florida.