NextEra Energy Inc. NEE is slated to report fourth-quarter 2024 results on Jan. 24, 2025.

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The Zacks Consensus Estimate for NEE’s fourth-quarter revenues is pegged at $6.49 billion, indicating a decline of 5.62% from the year-ago reported figure.

The consensus estimate for earnings is pegged at 51 cents per share. The Zacks Consensus Estimate for NEE’s fourth-quarter earnings has declined by 7.3% in the past 60 days. The estimate suggests a year-over-year decline of 1.92%.

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NEE Stock’s Earnings Surprise History

NextEra’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 7.05%.

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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.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: NextEra has an Earnings ESP of 0.00%.

Zacks Rank: NextEra currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Some companies in the same industry with the right combination of the two factors for an earnings surprise this season are Dominion Energy D and IDACORP Inc. IDA, each currently carrying a Zacks Rank #2. Earnings ESP of D and IDA are +5.98% and +0.8%, respectively.

Factors Likely to Have Shaped NEE Stock’s Q4 Earnings

NextEra’s unit, Florida Power & Light Company (“FPL”), is benefiting from the improving economic condition of the state. This division continues to add new customers in each quarter, and the addition of new retail customers boosts demand and drives earnings. FPL continues to make smart capital expenditures for the benefit of its customers and is keeping its utility bills nearly 40% lower than the national average, which is attracting new customers.

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 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 is well positioned to capitalize on the massive opportunity of expected power demand growth in the United States. NEE's scale, experience and technology continue to improve as the renewables and storage portfolio grows.

NextEra’s unit, Energy Resources, continues to add new projects to meet customer demand. Energy Resources has more than 24 gigawatts (GW) in the backlog of signed contracts, which provides clear visibility into the ongoing expansion of clean power generation.

NEE Stock’s Price Performance

NEE’s shares have gained 24.6% in the past year compared with the industry’s rally of 23.3%.

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NEE Stock Returns Better Than Its Industry

NextEra’s trailing 12-month return on equity (ROE) is 11.94%, ahead of the industry average of 10.83%. ROE is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The current ROE of the company indicates that it is using shareholders’ funds more efficiently than its peers.

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NextEra’s Shares Trading at a Premium

The company is currently valued at a premium compared to its industry on a forward 12-month P/E basis.

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Investment Thesis

NextEra continues to gain from improving economic conditions in Florida, which is adding new customers and creating fresh demand for its services. The company’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 it 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.

Summing Up

Improving economic conditions in Florida, increasing clean energy demand from the large data centers, and rising demand from the manufacturing sector and Oil and Gas sector is creating a long-term opportunity for the deployment of NextEra’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 as the stock is poised to grow further from current levels.

 

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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

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