We reiterate our Neutral recommendation on
NextEra Energy Inc.
). The electric utility company presently carries a Zacks Rank #3
BROOKFIELD INFR (BIP): Free Stock Analysis
NEXTERA ENERGY (NEE): Free Stock Analysis
OTTER TAIL CORP (OTTR): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
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Why the Reiteration?
NextEra Energy reported mixed financial results for the fourth
quarter and full year 2012 with earnings beating the Zacks
Consensus Estimate while the top line falling short. This was
attributable to positive rate changes, effective execution of
growth programs and continued customer expansion partially
tempered by lower prices and an unfavorable contribution from the
We believe NextEra's prospects look encouraging in the near term
on the back of a positive housing construction market in Florida.
The company is also focusing to develop its midstream businesses
and will derive significant benefits from the Lone Star
Transmission project expected to be operational in 2013.
Furthermore, the company has several renewable initiatives like
the Genesis Program, Desert Sunlight and Spain Solar lined up for
2013 and 2014. With clean energy likely to dominate the energy
generation portfolio in the future owing to the U.S. government's
strict pro-environment stance, we anticipate these projects will
boost NextEra's future growth.
However, the company's recent plan for massive modernization of
its power infrastructure in Florida might lead to cost pressure,
going forward. Moreover, volatility in commodity prices could
pose challenges to growth.
Other Stocks to Consider
Other stocks in the utility domain that are presently doing well
Pike Electric Corporation
Otter Tail Corporation
Brookfield Infrastructures Partners L.P.
). All these stocks carry a Zacks Rank #1 (Strong Buy).