NextEra Energy (NEE) Stock Forecast & Price Target

NextEra Energy is positioned favorably due to the significant growth trajectory of both its regulated utility, Florida Power & Light (FPL), which is anticipated to achieve a 9% compound annual growth rate in regulatory capital, potentially reaching $83–86 billion, and its renewable energy segment, NextEra Energy Resources (NEER), which expects adjusted EBITDA and EPS to grow by approximately 16% and 13%, respectively, through 2027. The company's overall generation capacity is projected to expand to about 81 gigawatts by the end of 2027, illustrating a robust strategy to capitalize on the increasing demand for renewable energy alongside co-located storage initiatives. Additionally, NextEra's asset recycling funding is set to increase significantly, from $3 billion to $5-7 billion for 2024-2026, enhancing its operational flexibility and investment potential across its growing energy portfolio.

NextEra Energy's stock has experienced a decline, underperforming the broader utility sector by over 450 basis points, following an Investor Day that failed to meet heightened investor expectations amid robust power demand. Key metrics concerning the company's renewable energy segment indicate a reduction in wind assets within the development backlog, dropping from 36% to 25% for the 2024-2027 period, which raises concerns about long-term growth potential. Additionally, external risks, such as decreasing government support for renewable energy, management changes, and elevated costs of capital, are pressuring the company's credit metrics and overall financial outlook.