It’s time to break down a utility name for the first time in a long time. Here is the breakdown of $NEE, better known as NextEra Energy.
Current Price: $74.16
52/Wk High: $77.02
52/Wk Low: $43.70
Market Cap: $143.4 billion
Dividend: $1.40 / 1.87% Yield
Read below for the breakdown!
NextEra Energy is a major holding company with a vast multitude of investments in electric power companies. NewEra Energy Inc. also maintains a subsidiary, NextEra Energy Resources which is a major company within the renewable energy sector.
NextEra Energy is also known for its investments within gas infrastructure and the Florida Power & Light Company, one of NextEra’s major business segments.
Lastly, according to Motley Fool, NextEra Energy has invested $75 billion in US electricity generation since 2004 and plans to further invest an additional $30 billion by 2022.
When it comes to future catalysts, a Biden win could assist the company further, given environmental policy that could be passed under a Biden administration.
Digging into the numbers NextEra Energy beat earnings expectations for Q3. NextEra reported a Q3 EPS of $0.67 versus the EPS consensus estimate of $0.65.
On the downside, revenues fell flat at $4.8 billion, representing a -14.12% decline since Q3 of 2019. Finally, GAAP net income grew, coming in at $1.229 billion for the quarter.
Management also produced solid guidance for the coming years. NextEra management expects the full year 2021 EPS to land between $9.60 to $10.15 as well as a 6% to 8% growth in 2022 and 2023.
Shifting into the financial standing of the company, the numbers could be better but are not terrible.
Total Debt: $48.296 billion
Total Liabilities: $89.095 billion
Total Assets: $126.382 billion
Cash & Short Term Inv: $1.961 billion
Based on the financial standing of the company, the valuation itself is worrying and could be a bit ahead of itself.
Price to Earnings: 36.72x
Price to Sales: 7.88x
Price to Book: 3.85x
Price to Cash Flow: 14.53x
Given the numbers, analysts remain mixed on NextEra Energy. Currently, the mean price target is $75.69/share, representing a 3.39% gain.
The analysts also maintain a high price target of $85.50/share, representing a 16.79% gain, while the low price target is $57.25/share, representing a -21.80% loss.
The big money is much more bullish though, with 76.39% of NextEra energy currently owned by institutions. Top holders include The Vanguard Group, State Street Global Advisors, and BlackRock Institutional Trust.
Although NextEra is very bullish, the stock has run big throughout 2020 and you might want to wait given the technicals. Taking a look at the six-month charts, the MACD is currently moving with downward momentum within a range of 1.02 down to 0.6728.
The six-month RSI on the other hand is running hotter than typical at 51.99 but is much more bullish than the CCI which currently sits at -49.5295. It is also important to note that $NEE currently trades roughly two points off its highs.
Overall, NextEra Energy is a solid pick if you are looking to get in on the renewable energy trends and solid future growth is likely, but in my opinion, there are many much better names in other sectors that present much better growth.
In short, I like NextEra Energy long but it has run quite far and I would wait for a pullback to jump in on the name.
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Disclaimer: This is not direct financial advice, simply an opinion based on independent research.