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Analyst Blog

On Apr 10 the shares of utility holding company NextEra Energy Inc. (NEE - Analyst Report) shot up to a new 52-week high of $80.07 on the back of its aggressive investments in natural gas and renewable assets. NextEra Energy’s overall record has been inspiring as it posted earnings surprise in three of the last four quarters resulting in an average beat of 3.50%.

Positive rate changes, timely execution of capital programs and steady expansion in the customer base were the principal factors triggering the stock to reach a new high.

The company’s focus on strengthening its natural gas midstream properties has further unlocked favorable prospects for the company. Its 345 Kilovolt (KV) transmission program in Texas was energized recently.

In early Mar 2013, the company successfully carried out the sale-off of its non-core hydro generating assets in White Pine Hydro Investments LLC to Brookfield Renewable Energy Partners L.P. The proceeds from the non-core asset sale will help NextEra Energy to invest in high-growth businesses.

Meanwhile, its strong position in the renewable field is something to look out for. NextEra’s 1,263 megawatt wind programs have come into operation while its large-scale international solar projects are lined up for the next few years. Clean energy generation is gradually finding increasing traction in the U.S. boding well for NextEra Energy.

Continuous modernization work will also ensure greater reliability and smooth electrical services to consumers in Florida thereby retaining their loyalty. The long-term expected earnings growth for the company is set at 5.95% while the Zacks Consensus Estimate for 2013 jumped 7.59% to $4.92 from $4.57 in 2012.

The company currently carries a Zacks Rank #3 (Hold). Other utility stocks performing well are Zacks Rank #1 (Strong Buy) Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report), Pike Electric Corp. (PIKE - Snapshot Report) and Empresa Nacional Electricidad SA (EOC - Snapshot Report).

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