It's been a good week for NextEra Energy, Inc. (NYSE:NEE) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.5% to US$66.90. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$5.7b, statutory earnings beat expectations by a notable 42%, coming in at US$1.10 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, NextEra Energy's 16 analysts are forecasting 2024 revenues to be US$27.3b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 7.8% to US$3.36 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$27.5b and earnings per share (EPS) of US$3.36 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$71.33. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on NextEra Energy, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$44.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that NextEra Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 9.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that NextEra Energy is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NextEra Energy's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on NextEra Energy. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple NextEra Energy analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for NextEra Energy (1 is a bit concerning!) that you should be aware of.
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