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NextEra (NEE) to Sell Natural Gas Assets, Reaffirms Outlook
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NextEra Energy’s (NEE - Free Report) unit Florida Power & Light Company (FPL) entered into a definitive agreement to sell Florida City Gas (FCG) to Chesapeake Utilities Corporation (CPK - Free Report) for $923 million in cash.
This deal will allow NextEra Energy to focus on its core operations. The transaction is expected to be accretive to NextEra Energy earnings immediately upon closing. A final closure is expected over the next several months, subject to the receipt of necessary regulatory approvals.
NextEra Energy is investing steadily in its infrastructure and expanding its clean power generation portfolio.
Reaffirms Long-term Outlook
NextEra Energy reaffirmed its long-term earnings growth outlook and continues to expect 2023 and 2024 adjusted earnings per share to be in the bands of $2.98 to $3.13 and $3.23 to $3.43, respectively.
For 2025 and 2026, NextEra Energy expects its earnings to increase in the range of 6% to 8%, off the 2024 adjusted earnings per share. This translates to a range of $3.45 to $3.70 for 2025 and $3.63 to $4.00 for 2026.
NEE aims to invest $52.7 billion from the remainder of 2023 through 2027 to strengthen its infrastructure. The company has been creating cost-saving opportunities in the past two years to offset the impact of higher interest costs.
NextEra Energy’s unit, FPL, announced a Ten-Year Site Plan and plans to add in excess of 20,000 Megawatt (MW) of cost-effective solar capacity to its portfolio.
The improving economic condition of Florida is also boosting the company’s prospects. Courtesy of the improving economy, FPL continues to add more customers each quarter to its portfolio and expand operations.
NextEra Energy’s other unit, NextEra Energy Resources, continues to work on its strategy of making a long-term investment in clean energy assets. The company expects to be able to add 33-42 gigawatts of new renewables in the 2023-2026 time frame to its generation portfolio via clean energy investments.
Transition in Energy Space
Utilities operating in the U.S. electric power sector are gradually moving toward cleaner energy sources for production. Per the U.S. Energy Information Administration, the annual share of U.S. electricity generation from renewable energy sources will rise from 22% in 2022 to 23% in 2023 and is expected to touch 25% in 2024 due to the continued addition of solar and wind-generating capacity.
A clear transition is evident in this industry, with more companies declaring zero-emission goals. Research and development over the years have resulted in a substantial decline in the cost of setting up utility-scale renewable power projects, aiding in reducing emissions.
Avista Corporation (AVA - Free Report) , a Zacks Rank #3 (Hold) stock, has been providing clean and reliable energy to customers. The company has taken initiatives to supply 100% clean electricity to customers by 2045.
AVA’s long-term (three- to five-year) earnings growth is pegged at 6.35%. Its dividend yield is 5.49%. The Zacks Consensus Estimate for 2023 of $2.30 reflects a year-over-year increase of 8.5%.
Xcel Energy (XEL - Free Report) , a Zacks Rank #3 stock, is focusing on electricity generation from clean sources. It is working to reduce 80% of carbon emissions by 2030 and generate 100% carbon-free electricity within 2050 from 2005 levels.
XEL’s long-term (three- to five-year) earnings growth is pinned at 6.07%. Its dividend yield is 3.5%. The Zacks Consensus Estimate for 2023 of $3.34 reflects a year-over-year increase of 5.4%.
Price Performance
In the past three months, shares of NextEra Energy have lost 11% compared with the industry’s 4% decline.
Image: Bigstock
NextEra (NEE) to Sell Natural Gas Assets, Reaffirms Outlook
NextEra Energy’s (NEE - Free Report) unit Florida Power & Light Company (FPL) entered into a definitive agreement to sell Florida City Gas (FCG) to Chesapeake Utilities Corporation (CPK - Free Report) for $923 million in cash.
This deal will allow NextEra Energy to focus on its core operations. The transaction is expected to be accretive to NextEra Energy earnings immediately upon closing. A final closure is expected over the next several months, subject to the receipt of necessary regulatory approvals.
NextEra Energy is investing steadily in its infrastructure and expanding its clean power generation portfolio.
Reaffirms Long-term Outlook
NextEra Energy reaffirmed its long-term earnings growth outlook and continues to expect 2023 and 2024 adjusted earnings per share to be in the bands of $2.98 to $3.13 and $3.23 to $3.43, respectively.
For 2025 and 2026, NextEra Energy expects its earnings to increase in the range of 6% to 8%, off the 2024 adjusted earnings per share. This translates to a range of $3.45 to $3.70 for 2025 and $3.63 to $4.00 for 2026.
NEE aims to invest $52.7 billion from the remainder of 2023 through 2027 to strengthen its infrastructure. The company has been creating cost-saving opportunities in the past two years to offset the impact of higher interest costs.
NextEra Energy’s unit, FPL, announced a Ten-Year Site Plan and plans to add in excess of 20,000 Megawatt (MW) of cost-effective solar capacity to its portfolio.
The improving economic condition of Florida is also boosting the company’s prospects. Courtesy of the improving economy, FPL continues to add more customers each quarter to its portfolio and expand operations.
NextEra Energy’s other unit, NextEra Energy Resources, continues to work on its strategy of making a long-term investment in clean energy assets. The company expects to be able to add 33-42 gigawatts of new renewables in the 2023-2026 time frame to its generation portfolio via clean energy investments.
Transition in Energy Space
Utilities operating in the U.S. electric power sector are gradually moving toward cleaner energy sources for production. Per the U.S. Energy Information Administration, the annual share of U.S. electricity generation from renewable energy sources will rise from 22% in 2022 to 23% in 2023 and is expected to touch 25% in 2024 due to the continued addition of solar and wind-generating capacity.
A clear transition is evident in this industry, with more companies declaring zero-emission goals. Research and development over the years have resulted in a substantial decline in the cost of setting up utility-scale renewable power projects, aiding in reducing emissions.
Avista Corporation (AVA - Free Report) , a Zacks Rank #3 (Hold) stock, has been providing clean and reliable energy to customers. The company has taken initiatives to supply 100% clean electricity to customers by 2045.
AVA’s long-term (three- to five-year) earnings growth is pegged at 6.35%. Its dividend yield is 5.49%. The Zacks Consensus Estimate for 2023 of $2.30 reflects a year-over-year increase of 8.5%.
Xcel Energy (XEL - Free Report) , a Zacks Rank #3 stock, is focusing on electricity generation from clean sources. It is working to reduce 80% of carbon emissions by 2030 and generate 100% carbon-free electricity within 2050 from 2005 levels.
XEL’s long-term (three- to five-year) earnings growth is pinned at 6.07%. Its dividend yield is 3.5%. The Zacks Consensus Estimate for 2023 of $3.34 reflects a year-over-year increase of 5.4%.
Price Performance
In the past three months, shares of NextEra Energy have lost 11% compared with the industry’s 4% decline.
Image Source: Zacks Investment Research
Zacks Rank
NextEra Energy currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.