NextEra Energy Outpaces Industry in a Month: How to Play the Stock?
NextEra Energy's rising share price highlights its strong operational performance and growing customer base, which is fueling increased demand for its services. Falling interest rates are set to reduce capital servicing costs and improve the prospects for this capital-intensive company.
Price performance (One Month)
NEE is trading above its 50 and 200-day simple moving average ('SMA'), signaling a bullish trend. The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important, as this is the first marker of an uptrend or downtrend of the stocks.
NEE 50 and 200 Day SMA
Should you consider adding NEE to your portfolio only based on positive price movements? Let's delve deeper and find out the factors that can help investors decide whether it is a good entry point to add the stock to their portfolio.
Factors Acting as Tailwinds for NEE Stock
Florida's expanding economy, driven by a robust job market, business migration and population inflows, has created fresh demand for electricity from all customer groups. NextEra Energy subsidiary, Florida Power & Light ('FPL'), serves more than 12 million people and plays a pivotal role in supporting Florida's ongoing economic development. As the state experiences accelerating population growth and economic expansion, the company stands to benefit from increasing electricity demand and a favorable regulatory climate.
NextEra Energy benefited through its well-timed strategic acquisitions, including Gulf Power, which expanded NEE's regulated utility footprint in Florida. The successful merger of Gulf Power into FPL streamlined operations, achieved meaningful cost synergies and strengthened the utility's customer base, laying a solid foundation for long-term earnings growth and dividend stability.
NextEra Energy, a capital-intensive company with a domestic focus, stands to gain from the Federal Reserve's decision to cut interest rates. The Fed has reduced the benchmark rate by 100 basis points, lowering it from the 5.25-5.5% range to 4.25-4.5%. Additional rate cuts anticipated in 2025 could further reduce the company's capital servicing costs.
The demand for reliable 24x7 clean electricity is rising in the United States, and NextEra Energy, through FPL-operated nuclear plants, can provide a stable and carbon-free energy to its customers. FPL operates four nuclear units in Florida, having a total generating capacity of 3,502 megawatts (MW).
NextEra Energy's other subsidiary, Energy Resources, continues to make long-term investments in clean energy assets. The company expects to be able to add 36.5-46.5 GW of new renewables in the 2024-2027 period to the generation portfolio via clean energy investments. Energy Resources' renewable backlog is more than 28 GW now.
NextEra Energy's Earnings Estimates Up Y/Y
NextEra Energy expects its 2025 earnings per share in the range of $3.45-$3.70, compared with $3.43 a year ago. The Zacks Consensus Estimate for NEE's 2025 and 2026 earnings per share indicates year-over-year growth of 7.29% and 7.95%, respectively. It expects to increase its earnings per share in the range of 6-8% annually through 2027 from the 2024 level.
The Zacks Consensus Estimate for Dominion Energy 's D 2025 and 2026 earnings per share indicates year-over-year growth of 22.38% and 5.65%, respectively. Dominion Energy has a portfolio of nearly 30,300 MW of electric-generating capacity and also operates nuclear power plants to produce clean energy.
NEE Stock Returns Better Than Its Industry
NextEra Energy's trailing 12-month return on equity (ROE) is 12.06%, ahead of the industry average of 10.41%. 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.
Another utility, American Electric Power 's AEP ROE is 11.68%, better than its industry. To further strengthen its operation, AEP intends to invest $54 billion over the 2025-2029 period.
NextEra Energy's Capital Return Program
NextEra Energy plans to increase the dividend rate annually by 10%, at least through 2026, from the 2024 base, subject to its board's approval. The current annual dividend of the company is $2.27 per share, and the dividend yield of 3.05% is better than the Zacks S&P 500 Composite's yield of 1.52%. Check NEE's dividend history here.
Dominion Energy's current annual dividend is $2.67 per share, reflecting a dividend yield of 4.65%.
NextEra Energy'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. NextEra Energy is currently trading at 19.42X compared with the industry average of 14.63%.
American Electric Power is trading at P/E F12M of 17.3X, a premium compared to its industry.
Wrapping Up
NextEra Energy maintains steady performance, supported by increasing demand for clean energy across its service areas. The company is consistently expanding its clean energy portfolio to keep pace with this rising demand. Florida's strong economic growth continues to present new opportunities for expansion.
With improved earnings estimates and a solid return on equity, holding this Zacks Rank #3 (Hold) stock remains a sound decision. However, since NEE is currently trading at a premium, it may be prudent to wait for a more attractive entry point before adding to positions.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include
Stock #1: A Disruptive Force with Notable Growth and Resilience
Stock #2: Bullish Signs Signaling to Buy the Dip
Stock #3: One of the Most Compelling Investments in the Market
Stock #4: Leader In a Red-Hot Industry Poised for Growth
Stock #5: Modern Omni-Channel Platform Coiled to Spring
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.
Download Atomic Opportunity: Nuclear Energy's Comeback free today.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
Dominion Energy Inc. (D): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
2 hours ago
- Globe and Mail
Earnings Summary on Avient
Key Points Earnings per share (Non-GAAP) of $0.80 for Q2 2025 exceeded consensus estimates and rising 5%, while Revenue (GAAP) reached $866.5 million, up 2% year over year, including a 1% favorable impact from foreign exchange. operating income for this segment declined year over year These 10 stocks could mint the next wave of millionaires › Avient (NYSE:AVNT), a global provider of specialty polymer materials and solutions, reported results on August 1, 2025. Adjusted earnings per share (Non-GAAP) were $0.80, topping analyst expectations of $0.78 (non-GAAP). Revenue (GAAP) also beat estimates at $866.5 million, up from $849.7 million (GAAP) in Q2 2024. Avient's results marked its fifth straight quarter of organic revenue growth and included expanding adjusted EBITDA margins, solid cash generation, and continued progress on debt reduction. Management described the overall quarter as one with steady gains in high-margin segments, though with pockets of ongoing softness in key North American markets. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (Non-GAAP) $0.80 $0.78 $0.76 5.3% EPS (GAAP) $0.57 $0.36 58.3 Revenue $866.5 million $852.87 million $849.7 million 2.0% Adjusted EBITDA Margin 17.2% 16.9% 0.3 pp Operating Income $96.1 million $72.5 million 32.6% Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Business Overview and Recent Focus Avient operates in the specialty materials industry, supplying polymers, colorants, additives, and engineered thermoplastics. Its key end markets include packaging, healthcare (like medical device materials), defense, transportation, consumer goods, and energy. Innovation is central to Avient's approach. In 2024, it invested $98.7 million in research and development, supporting a technical workforce of around 1,100 employees, including more than 100 with doctoral degrees. The company's recent business focus has centered around expanding high-value applications and maintaining operational agility. Key priorities include strengthening its role in healthcare, defense, and sustainable materials, alongside ongoing cost control and productivity efforts. Avient considers its global manufacturing footprint and customer partnerships essential for winning new business and managing shifting regulations, tariffs, and supply chains. Quarterly Highlights: Performance and Trends During the period, Avient modestly exceeded both revenue and adjusted earnings per share expectations, with revenue (GAAP) of $866.5 million and adjusted EPS (non-GAAP) of $0.80 both surpassing analyst estimates. Net income attributable to shareholders (GAAP) was $52.6 million, up from $33.6 million (GAAP) in Q2 2024. Adjusted net income was $73.5 million, compared to $70.2 million in Q2 2024. Adjusted EBITDA was $148.9 million, boosting the associated adjusted EBITDA margin to 17.2%, an improvement of 0.3 percentage points in adjusted EBITDA margin. These gains came despite continued weak demand in sectors such as North American consumer and transportation markets. Avient's Color, Additives and Inks family, which produces specialty color and additive products for a range of everyday finished goods, reported sales of $538.6 million, down slightly from the prior year period. Despite this, the segment lifted operating income to $90.3 million Management credited this to resilient packaging demand, including double-digit growth in personal care applications in the first quarter and solid beverage packaging sales worldwide, particularly in Asia and Latin America. The Specialty Engineered Materials product family, which includes specialized plastics and additives for demanding applications such as medical supplies, new energy vehicles, and defense gear, posted a 7% rise in sales to $329.7 million compared to Q2 2024. However, operating income in the Specialty Engineered Materials group declined 6.1% to $40.2 million compared to Q2 2024, reflecting pressure on segment margins. Notably, Avient highlighted double-digit sales growth in defense (which involves protective solutions for law enforcement and armed forces) and healthcare, where products are used in medical devices and consumables. While defense and healthcare offset much of the consumer and transportation weakness, those latter end-markets saw declines in the US and Canada, but growth in EMEA and Latin America. Cost discipline and operational improvements were also themes this quarter. Avient used cash flow from operations ($113 million) to pay down $50 million in debt. This keeps the company on track for its 2025 debt reduction target of $100–$200 million. Adjusted gross margin ticked slightly lower compared to Q2 2024, but the company expanded its adjusted operating margin to 11.9%, underscoring management's attention to productivity and cost management. The period also included notable one-time items. Year-to-date net income dropped on a GAAP basis due to a significant $86.3 million impairment charge linked to a cloud-based enterprise system. Management excluded this charge from adjusted earnings, but it impacted cash and reported net income. Looking Forward: Guidance and Areas to Monitor For the third quarter, Avient forecasts adjusted EPS of $0.70 For fiscal 2025, it narrowed full-year guidance to adjusted EPS of $2.77–$2.87, narrowed from a prior range of $2.70–$2.94. The outlook for adjusted EBITDA was updated to $545–$560 million. Management expects continued margin expansion from its higher-profit sectors—especially defense and healthcare—and affirms its commitment to cost control and further debt reduction. Order book visibility remains low (about 20–30 days out), and management stated, "we expect similar demand trends that we experienced in the first half." Several items will merit close attention in future quarters. Avient is counting on continued resilience in healthcare and defense end-markets, but a significant part of its targeted second-half 2025 earnings relies on further cost savings and foreign currency gains, rather than direct sales growth. Working capital requirements rose, partly from seasonal patterns and incentive payouts, so cash management will be important to watch. Raw material cost inflation is expected to be limited to 1–2% for the year. The company also reported that fewer than 3% of sales and 8% of raw material costs are exposed to tariff risks, due to a focus on local manufacturing, as disclosed by management in May. Overall, the business is positioned to benefit from its innovation, global reach, and a diversified customer base, while keeping a close eye on shifting demand in its core North American consumer and transportation markets. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,036%* — a market-crushing outperformance compared to 181% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of July 29, 2025 JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Globe and Mail
2 hours ago
- Globe and Mail
Paramount Global Reports Strong Q2 2025 Earnings
Paramount Global ( (PARA)) has released its Q2 earnings. Here is a breakdown of the information Paramount Global presented to its investors. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Paramount Global is a leading global media and entertainment company known for its extensive portfolio of iconic brands, including CBS, Paramount Pictures, and Paramount+, offering a wide range of content and streaming services. In its latest earnings report for Q2 2025, Paramount Global highlighted its continued transformation into a streaming-first company, with direct-to-consumer (DTC) revenue growing by 15% year-over-year, driven by the strong performance of Paramount+. The company's total revenue increased by 1% compared to the previous year, with notable growth in affiliate and subscription revenue. Paramount+ saw a 23% increase in total revenue and a 24% rise in subscription revenue, reflecting improved watch time and reduced churn. Despite a 6% decline in TV media revenue, the company achieved significant milestones in its content offerings, with CBS maintaining its position as the most-watched broadcast network in primetime for the 17th consecutive season. Paramount Pictures also reported a successful quarter, with the global premiere of 'Mission: Impossible – The Final Reckoning' setting a franchise record for the biggest global opening. Looking ahead, Paramount Global's management remains optimistic about the company's growth prospects, emphasizing the strength of its content strategy and the ongoing expansion of its streaming services.
Globe and Mail
3 hours ago
- Globe and Mail
Comcast Reports Strong Q2 2025 Earnings Growth
Comcast Corp ( (CMCSA)) has released its Q2 earnings. Here is a breakdown of the information Comcast Corp presented to its investors. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Comcast Corporation is a global media and technology company that provides broadband, wireless, and video services through brands like Xfinity and Sky, and produces and distributes content via NBC, Universal, and Peacock, among others. In its second-quarter earnings report for 2025, Comcast Corporation announced a 2.1% increase in revenue to $30.3 billion and a significant rise in net income attributable to Comcast to $11.1 billion, largely due to a $9.4 billion gain from the sale of its interest in Hulu. The company also reported a 3.3% increase in adjusted earnings per share to $1.25 and generated $4.5 billion in free cash flow. Comcast's wireless business achieved record growth, adding 378,000 lines, and its theme parks segment saw a revenue increase of 18.9%, driven by the opening of Epic Universe. The company's media segment also performed well, with Peacock revenue up 18%. Despite a decrease in adjusted net income by 1.7%, Comcast returned $2.9 billion to shareholders through dividends and share repurchases. Looking ahead, Comcast remains confident in its strategic focus and capital allocation, positioning itself well for future growth with plans to expand its content offerings, including NBA coverage on Peacock.
