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NextEra (NEE) to Gain From Investment, Growing Customer Base
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NextEra Energy’s (NEE - Free Report) organic projects, strategic acquisitions and expanding customer base are expected to boost its earnings. The merger of NEE’s units, Gulf Power and Florida Power & Light Company (“FPL”), further strengthened the company’s position.
However, this Zacks Rank #3 (Hold) stock has to face risks related to operation of nuclear units, weather fluctuations and stringent government regulations.
Tailwinds
NextEra is focused on organic growth. It aims to invest $54.4 billion during 2023-2027 to strengthen its infrastructure. Further, FPL plans to invest nearly $16.5 billion in Transmission & Distribution projects in the same time frame. The idea is to support customer growth and continue strengthening the energy grid that will allow NEE to supply power to customers even during storms.
The improving economic condition of Florida is also boosting the company’s prospects. Courtesy of the improving economy, FPL served 65,000 additional customers in the first quarter than in the year-ago period. The trend is expected to continue in the remaining quarters of 2023.
NEE continues to make investments in clean energy assets. It expects to add 33-42 gigawatts (GW) of new renewables during 2023-2026. Contribution from acquired assets also boosted the company’s earnings.
Headwinds
The operation and maintenance of NextEra’s nuclear generation facilities involve environmental, health and financial risks. These could result in fines or closure of the facilities, as well as increased costs and capital expenditures. The company’s business is also subject to complex regulations and unfavorable supply costs.
OGE Energy’s long-term (three to five-year) earnings growth rate is 17.9%. OGE delivered an average earnings surprise of 19.9% in the last four quarters.
Consolidated Edison’s long-term earnings growth rate is 2%. ED delivered an average earnings surprise of 9.5% in the last four quarters.
The Southern Company’s long-term earnings growth rate is 4%. SO delivered an average earnings surprise of 11.4% in the last four quarters.
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NextEra (NEE) to Gain From Investment, Growing Customer Base
NextEra Energy’s (NEE - Free Report) organic projects, strategic acquisitions and expanding customer base are expected to boost its earnings. The merger of NEE’s units, Gulf Power and Florida Power & Light Company (“FPL”), further strengthened the company’s position.
However, this Zacks Rank #3 (Hold) stock has to face risks related to operation of nuclear units, weather fluctuations and stringent government regulations.
Tailwinds
NextEra is focused on organic growth. It aims to invest $54.4 billion during 2023-2027 to strengthen its infrastructure. Further, FPL plans to invest nearly $16.5 billion in Transmission & Distribution projects in the same time frame. The idea is to support customer growth and continue strengthening the energy grid that will allow NEE to supply power to customers even during storms.
The improving economic condition of Florida is also boosting the company’s prospects. Courtesy of the improving economy, FPL served 65,000 additional customers in the first quarter than in the year-ago period. The trend is expected to continue in the remaining quarters of 2023.
NEE continues to make investments in clean energy assets. It expects to add 33-42 gigawatts (GW) of new renewables during 2023-2026. Contribution from acquired assets also boosted the company’s earnings.
Headwinds
The operation and maintenance of NextEra’s nuclear generation facilities involve environmental, health and financial risks. These could result in fines or closure of the facilities, as well as increased costs and capital expenditures. The company’s business is also subject to complex regulations and unfavorable supply costs.
Stocks to Consider
Some better-ranked utilities in the same industry are OGE Energy (OGE - Free Report) , Consolidated Edison (ED - Free Report) and The Southern Company (SO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
OGE Energy’s long-term (three to five-year) earnings growth rate is 17.9%. OGE delivered an average earnings surprise of 19.9% in the last four quarters.
Consolidated Edison’s long-term earnings growth rate is 2%. ED delivered an average earnings surprise of 9.5% in the last four quarters.
The Southern Company’s long-term earnings growth rate is 4%. SO delivered an average earnings surprise of 11.4% in the last four quarters.