On Wednesday, Scotiabank maintained a positive outlook on NextEra Energy (NYSE:NEE), reiterating its Sector Outperform rating and a stock price target of $73.00. The firm's stance comes following NextEra Energy's investor conference, where the company's management highlighted strong demand for renewables and storage, especially from technology sector customers. Despite this, the stock did not see an uptick as some investors had anticipated.
NextEra Energy, known for its robust renewable energy offerings and a utility segment that benefits from reliable service, low costs, and favorable regulatory environment, has seen its shares outperform peers in recent months. However, the investor conference did not lead to an increase in earnings per share (EPS) or dividend per share (DPS) guidance, which led to a less enthusiastic response from some investors.
The analyst noted that NextEra Energy's stock had attracted a significant number of "tourist" investors—generalists and tech investors drawn to the company's involvement in the high-profile data center megatrend. This diverse investor interest had driven the stock to trade at a considerable price-to-earnings (P/E) premium, with high expectations baked into the price.
Despite the market's reaction to the reiteration of guidance rather than an increase, Scotiabank's view remains bullish on NextEra Energy compared to other utilities. The firm suggests that the current weakness in the stock could present a buying opportunity, although it also acknowledges that some dedicated utility investors have recently engaged in profit-taking given the stock's elevated levels.
In other recent news, NextEra Energy has seen a flurry of analyst activity. BMO Capital Markets maintained an Outperform rating and raised the stock's price target to $79, while Evercore ISI increased its price target to $75 and maintained an "In Line" rating.
RBC Capital also demonstrated confidence in the company's growth prospects, raising its price target to $84 and reaffirming an Outperform rating. Goldman Sachs, too, maintained a Buy rating on NextEra Energy and increased the price target to $81.
NextEra Energy's earnings per share growth guidance has been extended through 2027, with a target of 6-8% based on a 2024 base year. This was announced during the company's Investor Conference, along with the expansion of its renewable backlog through 2027 and an extension of its financing strategy into the next year.
The company anticipates raising an additional $16 billion through tax equity and project finance to support its growth and investment plans.
Several other major financial institutions have adjusted their price targets for NextEra Energy, reflecting confidence in the company's growth prospects. CFRA adjusted its 12-month price target for the company to $85, maintaining a Buy rating. Edward Jones and Erste Group also maintained their Buy ratings for NextEra Energy, citing the company's strong position in the renewable energy sector.
Recent developments also saw significant changes in the company's executive team, with Kirk Crews transitioning to the role of Executive Vice President and Chief Risk Officer, and Brian Bolster taking over as the new EVP and CFO. These are among the recent developments for NextEra Energy.
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