NextEra Energy’s Q1 Performance: Mixed Results Amid Market Challenges
NextEra Energy, Inc. (NEE), with a market capitalization of $138.1 billion, stands as a major player in the clean energy sector, primarily based in Florida. It is recognized as the largest producer of wind and solar energy globally. The company operates through two main segments: Florida Power & Light, a utility serving millions of customers in Florida, and NextEra Energy Resources, focusing on renewable energy and battery storage throughout North America.
Recent Stock Performance Compared to Market Trends
Over the past 52 weeks, NEE shares have underperformed, experiencing a decline of 2.6%. In contrast, the S&P 500 Index ($SPX) has increased by 12.3%. Year-to-date (YTD), NEE shares are down 6.4%, while the S&P 500 has seen a smaller decline of 3.3%.
In a closer examination, NextEra has also lagged behind the Utilities Select Sector SPDR Fund (XLU), which delivered a return of 17.5% over the past year and a 5.4% gain YTD.
Q1 2025 Earnings: A Mixed Bag
On April 23, NextEra announced its Q1 2025 results, which led to a 1.4% drop in its shares during the subsequent trading session. The company reported adjusted earnings per share (EPS) of $0.99, which exceeded analyst projections of $0.97. This figure represents an 8.8% increase compared to the same quarter last year. However, revenue rose 9% year-over-year to $6.24 billion, falling short of the consensus estimate of $7.34 billion.
Forward Guidance and Market Risks
NextEra reaffirmed its adjusted EPS guidance for 2025, projecting figures between $3.45 and $3.70. The company expects an annual EPS growth of 6–8% through at least 2027. Although it benefits from high demand and a solid renewable energy pipeline, potential risks loom due to its reliance on Chinese supply chains for critical components like batteries amidst increasing U.S.-China trade tensions.
Analyst Insights and Stock Ratings
For the fiscal year ending December 2025, analysts anticipate a 7.3% year-over-year EPS growth for NEE, reaching $3.68. The company has recorded a strong history of earnings surprises, outperforming consensus estimates in the last four quarters.
Among the 21 analysts covering the stock, the consensus rating has shifted to a “Moderate Buy,” supported by 13 “Strong Buy” ratings, seven “Holds,” and one “Strong Sell.” This is a more optimistic outlook compared to a month ago, when the stock had 12 “Strong Buy” ratings.
Price Target Updates by Analysts
On April 22, Barclays PLC (BCS) adjusted its price target for NextEra from $77 to $73 while keeping an “Equal Weight” rating. This change reflects revised utilities sector models ahead of Q1 earnings, considering macroeconomic conditions and the evolving landscape of U.S. utilities tariffs. Barclays noted the sector’s defensive characteristics, suggesting it could continue to attract positive valuation adjustments.
NEE’s average price target of $81.74 indicates a potential upside of 8.4% based on current market prices. The highest price target of $97 suggests a substantial upside opportunity of 44.6%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views expressed herein represent the opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
