NEE Stock – Editor's Briefing

NextEra Energy logged a -2.7% change Friday, and is now trading at a price of $58.15 per share.

NextEra Energy returned losses of -23.0% last year, with its stock price reaching a high of $79.78 and a low of $47.15. Over the same period, the stock underperformed the S&P 500 index by -43.6%. AThe company's 50-day average price was $59.7. NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The large-cap Utilities company is based in Juno Beach, FL. NextEra Energy has offered a 3.1% dividend yield over the last 12 months.

Strong Revenue Growth With Increasing Reinvestment in the Business:

2018 2019 2020 2021 2022 2023
Revenue (MM) $16,727 $19,204 $17,997 $17,069 $20,956 $27,401
Revenue Growth n/a 14.81% -6.29% -5.16% 22.77% 30.75%
Operating Margins 26% 28% 28% 17% 19% 35%
Net Margins 40% 20% 16% 21% 20% 28%
Net Income (MM) $6,638 $3,769 $2,919 $3,573 $4,147 $7,622
Net Interest Expense (MM) $3,072 -$1,517 -$2,703 $262 -$249 -$1,823
Depreciation & Amort. (MM) $3,911 $4,216 $4,052 $3,924 $4,503 $5,443
Earnings Per Share $3.48 $1.94 $1.48 $1.81 $2.1 $3.74
EPS Growth n/a -44.25% -23.71% 22.3% 16.02% 78.1%
Diluted Shares (MM) 1,908 1,942 1,969 1,972 1,979 2,036
Free Cash Flow (MM) $4,455 $4,582 $3,538 $2,558 $2,257 $3,344
Capital Expenditures (MM) $2,138 $3,573 $4,445 $4,995 $6,005 $6,074
Current Ratio 0.36 0.53 0.47 0.53 0.51 0.5

NextEra Energy has rapidly growing revenues and increasing reinvestment in the business, strong operating margins with a positive growth rate, and positive EPS growth. However, the firm suffers from positive cash flows and not enough current assets to cover current liabilities.

NextEra Energy's Valuation Is in Line With Its Sector Averages:

NextEra Energy has a trailing twelve month P/E ratio of 16.6, compared to an average of 17.53 for the Utilities sector. Based on its EPS guidance of $3.66, the company has a forward P/E ratio of 16.3. The 0.7% compound average growth rate of NextEra Energy's historical and projected earnings per share yields a PEG ratio of 22.93. This suggests that these shares are overvalued. Furthermore, NextEra Energy is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.54 is higher than the sector average of 1.71. The company's shares are currently trading 31.8% above their Graham number.

NextEra Energy Has an Average Rating of Buy:

The 20 analysts following NextEra Energy have set target prices ranging from $46.0 to $102.8 per share, for an average of $73.16 with a buy rating. The company is trading -20.5% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

NextEra Energy has a very low short interest because 0.9% of the company's shares are sold short. Institutions own 81.5% of the company's shares, and the insider ownership rate stands at 0.17%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $11,538,714,804.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.