NextEra Energy’s Anticipated Q4 Earnings and Market Reception

• NextEra Energy (NYSE:NEE) is set to disclose its Q4 earnings outcomes on Thursday, January 25th, before the market opens.
• Analysts anticipate an EPS of $0.49 (-3.9% Y/Y) and a revenue estimate of $6.32B (+2.5% Y/Y).
• Over the past 2 years, NEE has surpassed EPS projections 100% of the time and revenue estimates 50% of the time.
• Over the last 3 months, there have been 1 upward revision and 6 downward revisions for EPS estimates, with 1 upward and 4 downward revisions for revenue estimates.
• In its Q3 report on October 24, the company’s earnings declined from a year ago but exceeded analyst expectations, with a 6.7% Y/Y increase in revenues to $7.17B.
• NEE currently holds a Quant rating of “HOLD”, with a 3.20 rating score.
• Its industry ranking among electric utilities stocks stands at 17 out of 41, according to SA’s Quant ranking.
• Both Wall Street and Seeking Alpha authors rate NEE stock as a “BUY”.
• In 2023, NEE stock fell 25.3%, while the S&P 500 Utility Sector Index declined by 10.2%. In contrast, the benchmark S&P 500 Index rose 24.2% for the year.
• The stock has fallen 6.5% so far this year as of Tuesday’s close.

Insights and Commentary

If an investor must own one utility in 2024, NextEra Energy should be the pick, Guggenheim analysts said earlier on Monday, as the firm shuffled ratings across the sector and removed all Sell ratings, urging investors to “buy, buy, buy.”

Guggenheim analysts led by Shahriar Pourreza said NextEra Energy shares are oversold, with arguably the most to gain from improving fundamentals and macro backdrop, adding the company could further lift the entire sector as datapoints continue to improve beginning with the Q4 earnings call.

SA contributor Daniel Jones in his Jan. 23 report wrote that, “NextEra Energy is an interesting company. But it’s not one that I am currently all that optimistic about. Don’t get me wrong. This is not a bad business. It is a healthy firm that has access to a really popular part of the country. However, some of the recent growth has been driven by temporary changes, and there’s the fact that shares are not as cheap as I would like them to be. If this picture changes, my own mindset could change as well. But for now, I believe that a ‘hold’ rating makes the most sense.”