NextEra Energy Inc. NEE is slated to report third-quarter 2024 results on Oct. 23, 2024.
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The Zacks Consensus Estimate for NEE’s third-quarter revenues is pegged at $8.17 billion, indicating a 13.88% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at $1.08 per share. The Zacks Consensus Estimate for NEE’s third-quarter earnings has remained the same in the past 60 days. The estimate suggests year-over-year growth of 14.89%.
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NextEra Energy Stock’s Earnings Surprise History
NextEra’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 8.1%.
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What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for NextEra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.
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NextEra Energy, Inc. Price and EPS Surprise
NextEra Energy, Inc. price-eps-surprise | NextEra Energy, Inc. Quote
Earnings ESP: NextEra has an Earnings ESP of -7.41%.
Zacks Rank: NextEra Energy currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other companies in the same industry having the right combination of the two factors for an earnings surprise this season are Fortis Inc. FTS, Public Service Enterprise Group PEG, and IDACORP Inc. IDA each currently carrying a Zacks Rank #2. Earnings ESP of FTS, PEG, and IDA are +2.86%, +1.5%, and +0.57%, respectively.
Factors Likely to Have Shaped NEE’s Q3 Earnings
NextEra’s unit, Florida Power & Light Company, is benefiting from the improving economic condition of the state. The addition of new customers boosts demand and drives earnings.
The company has been gaining from and will continue to benefit from rising demand from big data centers and higher demand from oil and gas companies in the Permian Basin region. NextEra Energy is efficiently operating its large natural gas fleet in Florida to meet the rising demand for clean energy. The company is focused on deploying low-cost, fast-to-deploy renewables that help to keep power prices down for customers.
NextEra’s unit, Energy Resources, continues to add new projects to meet customer demand. Energy Resources has more than 21 GW in the backlog of signed contracts, which provides clear visibility into the ongoing expansion of clean power generation.
NextEra Energy Stock’s Price Performance
NEE’s shares have gained 67.6% in the past year compared with the industry’s rally of 38%.
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NextEra Stock Trading at a Premium
NextEra Energy is currently valued at a premium compared to its industry on a forward 12-month P/E basis. The company is trading at a forward 12 months P/E multiple of 23.33X compared with the industry average of 16.9X.
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Investment Thesis
NextEra Energy continues to gain from improving economic conditions in Florida, which is adding new customers and creating fresh demand for its services. NextEra’s focus on adding more renewable projects in electricity generation and adding new battery storage in the system will support renewable power generation.
Efficient cost management lowers operating costs and enables the company to keep its utility bills much lower than the national average, which attracts more customers to its utility services.
The decline in interest rates will act as an added advantage for this capital-intensive industry, but given its premium valuation at present, it is better to hold positions in the stock.
Conclusion
Improving economic conditions in Florida and some other regions where NextEra Energy has operations is creating fresh demand. With demand for clean energy rising from multiple sectors is creating a long-term opportunity for the deployment of NextEra Energy’s low-cost renewable generation units.
Given the rising demand and customer addition, it will be wise to remain invested in this utility at this moment.
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See This Stock Now for Free >>NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report
IDACORP, Inc. (IDA) : Free Stock Analysis Report
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