Juno Beach, Florida-based NextEra Energy, Inc. (NEE) generates, transmits, distributes, and sells electric power and operates multiple commercial nuclear power units. Valued at $148.6 billion by market cap, the company generates electricity through wind, solar, and natural gas projects. NEE owns Florida Power & Light Company, America’s largest electric utility company that provides electricity to approximately 5.9 million customer accounts or more than 12 million people across Florida.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and NEE perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the regulated electric utilities industry. With a renewable energy portfolio of over 34 GW, NEE is a market leader in clean energy. The company is well-positioned to capitalize on the growing demand for renewables and is at the forefront of the transition to sustainable energy, aligning with global trends towards decarbonization.
Despite its notable strength, NEE slipped 16.2% from its 52-week high of $86.10, achieved on Oct. 3, 2024. Over the past three months, NEE stock gained 3.1%, underperforming the Utilities Select Sector SPDR Fund’s (XLU) 7% gains during the same time frame.
In the longer term, shares of NEE rose marginally on a YTD basis but dipped 5.9% over the past 52 weeks, underperforming XLU’s YTD gains of 7.3% and 14.8% returns over the last year.
To confirm the bearish trend, NEE has been trading below its 200-day moving average since mid-December, 2024. However, the stock is trading above its 50-day moving average since late May, with slight fluctuations.
NEE’s underperformance is due to risks associated with operating nuclear power generation units, adverse weather conditions, and rising supply costs. Additionally, the company faces potential risks from its reliance on Chinese supply chains for essential components like batteries, amidst tensions between the U.S. and China.
On Apr. 23, NEE shares closed up by 1% after reporting its Q1 results. Its adjusted EPS of $0.99 exceeded Wall Street expectations of $0.97. The company’s revenue stood at $6.2 billion, up 9% year over year. NEE expects full-year adjusted EPS in the range of $3.45 to $3.70.
In the competitive arena of regulated electric utilities, DTE Energy Company (DTE) has taken the lead over NEE, showing resilience with a 10.9% gain on a YTD basis and 17.9% uptick over the past 52 weeks.
Wall Street analysts are moderately bullish on NEE’s prospects. The stock has a consensus “Moderate Buy” rating from the 21 analysts covering it, and the mean price target of $81 suggests a potential upside of 12.3% from current price levels.
