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NextEra Energy (NEE) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

NextEra Energy (NEE) closed at $220.14 in the latest trading session, marking a +0.15% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.09%. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq lost 0.17%.

Coming into today, shares of the parent company of Florida Power & Light Co. Had gained 2.13% in the past month. In that same time, the Utilities sector gained 4.34%, while the S&P 500 gained 4.92%.

NEE will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.19, up 0.46% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.27 billion, up 19.3% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.37 per share and revenue of $18.94 billion. These totals would mark changes of +8.7% and +13.15%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for NEE. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.34% higher. NEE is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, NEE is currently trading at a Forward P/E ratio of 26.28. For comparison, its industry has an average Forward P/E of 21.03, which means NEE is trading at a premium to the group.

Investors should also note that NEE has a PEG ratio of 3.28 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Utility - Electric Power was holding an average PEG ratio of 3.88 at yesterday's closing price.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 100, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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