NextEra Energy (NEE) Gains But Lags Market: What You Should Know

Zacks Equity Research

NextEra Energy (NEE) closed at $254.38 in the latest trading session, marking a +0.99% move from the prior day. This change lagged the S&P 500's 2.62% gain on the day. Elsewhere, the Dow gained 3.16%, while the tech-heavy Nasdaq added 2.06%.

NEE will be looking to display strength as it nears its next earnings release. On that day, NEE is projected to report earnings of $2.50 per share, which would represent year-over-year growth of 6.38%. Our most recent consensus estimate is calling for quarterly revenue of $5.28 billion, up 6.14% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.06 per share and revenue of $20.55 billion, which would represent changes of +8.24% and +7.02%, respectively, from the prior year.

Any recent changes to analyst estimates for NEE should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.18% higher. NEE is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, NEE is holding a Forward P/E ratio of 27.79. For comparison, its industry has an average Forward P/E of 18.44, which means NEE is trading at a premium to the group.

Investors should also note that NEE has a PEG ratio of 3.6 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NEE's industry had an average PEG ratio of 3.69 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 79, putting it in the top 32% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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