Latest news with #NextEra
Yahoo
2 days ago
- Business
- Yahoo
20250604 - NextEra Energy: A Misunderstood Growth Machine
It's not easy to find bargains among well-established corporate giants. However, Mr. Market sometimes presents such opportunities to prudent investors. The renewable energy sector has taken a beating since President Trump's victory in November as he has made his intentions clear to support the fossil fuel sector. NextEra Energy, Inc. (NYSE:NEE), which owns the largest electric utility in the United States (Florida Power & Light Company) and also one of the leading clean energy companies in the world (NextEra Energy Resources) has also come under pressure as a result, losing over 6% of its market value in 2025 alone. A deeper dive into the company's supply chain reveals NextEra is largely immune to tariffs, making it a contrarian play in the renewable energy sector. The reasonable valuation of the company sweetens the deal, while attractive long-term macroeconomic prospects suggest a long runway for NextEra to grow. Warning! GuruFocus has detected 9 Warning Signs with NEE. NextEra Energy, headquartered in Florida, is the parent company of both Florida Power & Light and NextEra Energy Resources. Based on retail electricity sold, FPL is the largest rate-regulated utility in the U.S., serving approximately 12 million customers in Florida. NEER, on the other hand, serves the wholesale energy markets in both the U.S. and Canada and is the world's largest wind and solar projects operator. The company also has a battery storage business. Through FPL and NEER, NextEra maintains a well-diversified energy portfolio consisting of wind, solar, nuclear power, and even natural gas. Before moving on to discuss the long-term outlook for NextEra, it is important to address the tariff threats facing the renewable energy industry that have dampened the investor sentiment toward NextEra stock. On April 21, the U.S. Department of Commerce announced its study results from an investigation of antidumping duties on solar cells imported from several Southeast Asian nations, including Cambodia, Malaysia, Thailand, and Vietnam. Based on the findings, the Commerce Department recommended substantial tariffs on crystalline photovoltaic cells imported from these countries. For context, several Cambodian companies are expected to see tariffs exceeding a staggering 3,400%, while almost all other exporters representing Southeast Asian nations are expected to see tariffs exceeding 100%. The International Trade Administration is expected to announce its final determination on these tariffs by June 2, in less than a month. Southeast Asian nations have played a critical role in helping solar project costs remain low for Americans for years. In 2023, the four main countries targeted by the latest round of U.S. tariffs exported almost $12 billion worth of solar modules to the United States. Exhibit 1: Import statistics Source: International Trade Administration Newly announced tariffs are likely to make it more expensive for Americans to access solar power. However, NextEra Energy is in a unique position to show resilience from these tariffs compared to many of its peers that are heavily reliant on solar modules imported from Southeast Asia. First, NextEra Energy has commendably managed its supply chain efficiently in the last few years, reducing its reliance on Southeast Asia. For example, the company is currently sourcing wind turbines domestically, which includes manufacturing required components in its plants in Florida. The company also has ties with tariff-unaffected nations such as India. Strategic diversification of the supply chain to gain exposure to U.S. allies has made it possible for NextEra to weather the tariff storm better than most of its peers. Second, NextEra is often the largest customer of many of its suppliers, which creates wiggle room for the company to negotiate deals with suppliers to pass on any tariff impact to them. Suppliers have little bargaining power with NextEra because of its scale, which is likely to come to the rescue in the next few months. Third, NextEra has already secured contracts with domestic suppliers to meet the majority of its backlog for its battery storage business, leaving little exposure to tariffs. Commenting on the overall tariff exposure of the company during the first-quarter earnings call a couple of weeks ago, NextEra CEO John Ketchum revealed that the overall tariff exposure of the company through 2028 is just $150 million compared to total capital expenditures planned through 2028 of $75 billion. In a nutshell, only 0.2% of the company's capex budget is exposed to new tariffs. Encouragingly, CEO Ketchum is confident of NextEra's ability to shield itself from this exposure through renegotiated contracts. We think that we're looking at around $150 million of exposure on tariffs. That is based on the contractual protections we have in our existing contracts with suppliers and the discussions that we have had with them since Liberation Day on April 2. So that's the first piece. So that works you down to $150 million. Then the point we were making in the prepared remarks is that not only do we have the ability to shift tariff risk to suppliers and supply contracts, which I just covered, we also have trade measure protection provisions in our customer contracts. So we believe we got a really good shot at working with our customers to take that $150 million exposure down significantly and perhaps even down to zero if we use the track record we had around circumvention. Going by the CEO's above remarks and the strengths highlighted earlier in this segment, investor fears over new tariffs seem overblown. Tariff threats aside, the next step is to evaluate the long-term industry outlook for NextEra Energy. After a period of lackluster demand growth, the U.S. has entered a new era in which the demand for electricity is expected to grow at a healthy rate. According to Deloitte, the electricity demand in the U.S. will increase by 10% to 17% between 2024 and 2030, marking a notable improvement from stable demand over the past five years. The main reasons behind these rosy projections include the growing electricity consumption by data centers and the exponential growth in EVs. According to Deolitte, data center demand alone will lead to around 11 GW of incremental electricity demand by 2030. In addition to this, the expected boost in domestic manufacturing will also drive electricity demand higher in the coming years. With electricity demand predicted to see historically high growth in the next five years, NextEra's utility arm, Florida Power, is well-positioned to thrive. To capture a sizeable share of the growing electricity demand, FPL is planning to invest approximately $50 billion through 2029 and add more than 25 GW of new capacity by 2034. These ambitious goals align well with the projected growth in electricity demand. Another tailwind helping NextEra is the expected growth in renewable energy consumption. Although the Trump administration may initially focus on fossil fuel growth, the long-term outlook for renewable energy adoption remains strong. According to the International Energy Administration's ambitious plans which aim to achieve 100% clean electricity by 2035, wind and solar energy projects are expected to account for around 70% of energy generation. This equates to approximately 2 TW of capacity. As the global leader in wind and solar power generation, NextEra Energy Resources is well-positioned to benefit from this projected growth. NextEra will also benefit from its battery storage facilities. To meet renewable energy goals, high-quality energy storage solutions are necessary. Identifying this need, NextEra has aggressively expanded into battery storage, which has enabled the company to be recognized as a 360-degree renewable energy solutions provider. NextEra Energy is currently valued at a forward P/E of 18.28 in comparison to its five-year average of 24.33, which implies the company is cheaply valued from a historical valuation perspective. At the current market price, the dividend yield is also attractive at just over 3.4%. Interestingly, the company is expected to return to growth this year after registering a 12% YoY revenue decline in 2024. According to analyst projections, revenue will grow almost 16% this year, followed by 8.3% in 2026 and 11.6% in 2027. Earnings are also expected to grow at high-single-digit rates through 2029. These estimates seem rational given the strong growth expectations for electricity demand in the U.S. and the steady growth in renewable energy usage. Despite the market pessimism toward renewable energy stocks following President Trump's victory last November, some investing gurus are betting on NextEra Energy. Some of the institutional investors that added to their long position in NextEra leading up to 2025 include Blackstone Group, T. Rowe Price, and D. E. Shaw. However, there are other gurus who have reduced their exposure to NextEra in recent times, including Mario Gabelli (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), and Robert Bruce (Trades, Portfolio). According to GuruFocus data, NextEra has seen more guru sells than buys in recent times. Source: GuruFocus NextEra Energy stock has performed poorly this year due to concerns hanging over the sustainability of the renewable industry's growth under President Trump's administration. Although short-term challenges persist, a closer evaluation of newly announced tariffs reveals NextEra is unlikely to be hurt. The long-term outlook for FPL is promising with several tailwinds driving the demand for electricity in the United States, and NEER will benefit from the momentum behind renewable energy. Valued reasonably along with a dividend yield of 3.4%, NextEra Energy seems an attractive bet on the global energy transition. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
20250604 - NextEra Energy: A Misunderstood Growth Machine
It's not easy to find bargains among well-established corporate giants. However, Mr. Market sometimes presents such opportunities to prudent investors. The renewable energy sector has taken a beating since President Trump's victory in November as he has made his intentions clear to support the fossil fuel sector. NextEra Energy, Inc. (NYSE:NEE), which owns the largest electric utility in the United States (Florida Power & Light Company) and also one of the leading clean energy companies in the world (NextEra Energy Resources) has also come under pressure as a result, losing over 6% of its market value in 2025 alone. A deeper dive into the company's supply chain reveals NextEra is largely immune to tariffs, making it a contrarian play in the renewable energy sector. The reasonable valuation of the company sweetens the deal, while attractive long-term macroeconomic prospects suggest a long runway for NextEra to grow. Warning! GuruFocus has detected 9 Warning Signs with NEE. NextEra Energy, headquartered in Florida, is the parent company of both Florida Power & Light and NextEra Energy Resources. Based on retail electricity sold, FPL is the largest rate-regulated utility in the U.S., serving approximately 12 million customers in Florida. NEER, on the other hand, serves the wholesale energy markets in both the U.S. and Canada and is the world's largest wind and solar projects operator. The company also has a battery storage business. Through FPL and NEER, NextEra maintains a well-diversified energy portfolio consisting of wind, solar, nuclear power, and even natural gas. Before moving on to discuss the long-term outlook for NextEra, it is important to address the tariff threats facing the renewable energy industry that have dampened the investor sentiment toward NextEra stock. On April 21, the U.S. Department of Commerce announced its study results from an investigation of antidumping duties on solar cells imported from several Southeast Asian nations, including Cambodia, Malaysia, Thailand, and Vietnam. Based on the findings, the Commerce Department recommended substantial tariffs on crystalline photovoltaic cells imported from these countries. For context, several Cambodian companies are expected to see tariffs exceeding a staggering 3,400%, while almost all other exporters representing Southeast Asian nations are expected to see tariffs exceeding 100%. The International Trade Administration is expected to announce its final determination on these tariffs by June 2, in less than a month. Southeast Asian nations have played a critical role in helping solar project costs remain low for Americans for years. In 2023, the four main countries targeted by the latest round of U.S. tariffs exported almost $12 billion worth of solar modules to the United States. Exhibit 1: Import statistics Source: International Trade Administration Newly announced tariffs are likely to make it more expensive for Americans to access solar power. However, NextEra Energy is in a unique position to show resilience from these tariffs compared to many of its peers that are heavily reliant on solar modules imported from Southeast Asia. First, NextEra Energy has commendably managed its supply chain efficiently in the last few years, reducing its reliance on Southeast Asia. For example, the company is currently sourcing wind turbines domestically, which includes manufacturing required components in its plants in Florida. The company also has ties with tariff-unaffected nations such as India. Strategic diversification of the supply chain to gain exposure to U.S. allies has made it possible for NextEra to weather the tariff storm better than most of its peers. Second, NextEra is often the largest customer of many of its suppliers, which creates wiggle room for the company to negotiate deals with suppliers to pass on any tariff impact to them. Suppliers have little bargaining power with NextEra because of its scale, which is likely to come to the rescue in the next few months. Third, NextEra has already secured contracts with domestic suppliers to meet the majority of its backlog for its battery storage business, leaving little exposure to tariffs. Commenting on the overall tariff exposure of the company during the first-quarter earnings call a couple of weeks ago, NextEra CEO John Ketchum revealed that the overall tariff exposure of the company through 2028 is just $150 million compared to total capital expenditures planned through 2028 of $75 billion. In a nutshell, only 0.2% of the company's capex budget is exposed to new tariffs. Encouragingly, CEO Ketchum is confident of NextEra's ability to shield itself from this exposure through renegotiated contracts. We think that we're looking at around $150 million of exposure on tariffs. That is based on the contractual protections we have in our existing contracts with suppliers and the discussions that we have had with them since Liberation Day on April 2. So that's the first piece. So that works you down to $150 million. Then the point we were making in the prepared remarks is that not only do we have the ability to shift tariff risk to suppliers and supply contracts, which I just covered, we also have trade measure protection provisions in our customer contracts. So we believe we got a really good shot at working with our customers to take that $150 million exposure down significantly and perhaps even down to zero if we use the track record we had around circumvention. Going by the CEO's above remarks and the strengths highlighted earlier in this segment, investor fears over new tariffs seem overblown. Tariff threats aside, the next step is to evaluate the long-term industry outlook for NextEra Energy. After a period of lackluster demand growth, the U.S. has entered a new era in which the demand for electricity is expected to grow at a healthy rate. According to Deloitte, the electricity demand in the U.S. will increase by 10% to 17% between 2024 and 2030, marking a notable improvement from stable demand over the past five years. The main reasons behind these rosy projections include the growing electricity consumption by data centers and the exponential growth in EVs. According to Deolitte, data center demand alone will lead to around 11 GW of incremental electricity demand by 2030. In addition to this, the expected boost in domestic manufacturing will also drive electricity demand higher in the coming years. With electricity demand predicted to see historically high growth in the next five years, NextEra's utility arm, Florida Power, is well-positioned to thrive. To capture a sizeable share of the growing electricity demand, FPL is planning to invest approximately $50 billion through 2029 and add more than 25 GW of new capacity by 2034. These ambitious goals align well with the projected growth in electricity demand. Another tailwind helping NextEra is the expected growth in renewable energy consumption. Although the Trump administration may initially focus on fossil fuel growth, the long-term outlook for renewable energy adoption remains strong. According to the International Energy Administration's ambitious plans which aim to achieve 100% clean electricity by 2035, wind and solar energy projects are expected to account for around 70% of energy generation. This equates to approximately 2 TW of capacity. As the global leader in wind and solar power generation, NextEra Energy Resources is well-positioned to benefit from this projected growth. NextEra will also benefit from its battery storage facilities. To meet renewable energy goals, high-quality energy storage solutions are necessary. Identifying this need, NextEra has aggressively expanded into battery storage, which has enabled the company to be recognized as a 360-degree renewable energy solutions provider. NextEra Energy is currently valued at a forward P/E of 18.28 in comparison to its five-year average of 24.33, which implies the company is cheaply valued from a historical valuation perspective. At the current market price, the dividend yield is also attractive at just over 3.4%. Interestingly, the company is expected to return to growth this year after registering a 12% YoY revenue decline in 2024. According to analyst projections, revenue will grow almost 16% this year, followed by 8.3% in 2026 and 11.6% in 2027. Earnings are also expected to grow at high-single-digit rates through 2029. These estimates seem rational given the strong growth expectations for electricity demand in the U.S. and the steady growth in renewable energy usage. Despite the market pessimism toward renewable energy stocks following President Trump's victory last November, some investing gurus are betting on NextEra Energy. Some of the institutional investors that added to their long position in NextEra leading up to 2025 include Blackstone Group, T. Rowe Price, and D. E. Shaw. However, there are other gurus who have reduced their exposure to NextEra in recent times, including Mario Gabelli (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), and Robert Bruce (Trades, Portfolio). According to GuruFocus data, NextEra has seen more guru sells than buys in recent times. Source: GuruFocus NextEra Energy stock has performed poorly this year due to concerns hanging over the sustainability of the renewable industry's growth under President Trump's administration. Although short-term challenges persist, a closer evaluation of newly announced tariffs reveals NextEra is unlikely to be hurt. The long-term outlook for FPL is promising with several tailwinds driving the demand for electricity in the United States, and NEER will benefit from the momentum behind renewable energy. Valued reasonably along with a dividend yield of 3.4%, NextEra Energy seems an attractive bet on the global energy transition. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Arab News
29-05-2025
- Business
- Arab News
Aramco Digital, LTIMindtree launch NextEra — a next-generation IT services company in KSA
Aramco Digital, the digital and technology subsidiary of Aramco, and LTIMindtree, a global technology consulting and digital solutions company, have launched NextEra, a next-generation IT services company headquartered in Saudi Arabia. A strategic joint venture between LTIMindtree and Aramco Digital, LTIM Aramco Digital Solutions for Information Technology Company-NextEra is designed to accelerate Saudi Arabia's digital transformation in alignment with the Kingdom's ambitious Vision 2030. The initiative reflects a shared commitment to building a robust, homegrown digital ecosystem that fuels innovation, economic diversification, and sustainable growth. Powered by advanced and emerging technologies, NextEra aims to offer organizations future-ready solutions that enhance operational efficiency, enable intelligent decision-making, and deliver seamless customer experiences. NextEra's foundation is built upon six core pillars — emerging technologies and automation, scalable cloud services, deep industry expertise, digital engineering, sustainability, and customer centricity. Nabil Al-Nuaim, chairman of NextEra and CEO of Aramco Digital, said: 'The launch of NextEra marks a pivotal milestone in our efforts to localize IT services and contribute to advancing the Kingdom's digital landscape. 'We are glad to partner with LTIMindtree in establishing this joint venture, which brings together world-class technology expertise and deep local insight. 'Through NextEra, we aim to build a future-ready digital ecosystem that drives innovation, enhances national competitiveness, and contributes to the Kingdom's digital transformation journey under Vision 2030. 'This collaboration also reinforces Aramco Digital's commitment to accelerating digital progress across industrial and other strategic sectors, delivering sustainable impact, long-term value, and alignment with national priorities. "Partnering with Aramco Digital to establish NextEra is a significant milestone in LTIMindtree's global expansion strategy. We are excited to bring our deep technical capabilities and cross-industry experience to support Saudi businesses in their digital journeys,' said Venu Lambu, vice chairman, NextEra; chief executive officer (designate) and whole-time director, LTIMindtree. 'This joint venture is a key step toward Saudi Arabia's Vision 2030, as we build a national platform for innovation and sustainable digital growth,' said Dina Aboonoq, CEO and board member, NextEra; executive VP, LTIMindtree. 'Through advanced delivery centers and partnerships with local universities, we're accelerating digital transformation, empowering local talent, and supporting SMEs and major industries with tailored managed services that ensure excellence and compliance.' NextEra is uniquely positioned to blend local insight with global expertise, delivering tailored solutions that cater to the dynamic needs of regional and international markets. From optimizing operations to fostering innovation across critical sectors, the company aims to be a cornerstone of Saudi Arabia's digitally driven future. Aramco Digital is the digital and technology subsidiary of Aramco, established to contribute to the Kingdom's digital transformation under Vision 2030. It aims to advance industrial digital solutions in partnership with local and global partners, enabling sustainable growth across industrial and other strategic sectors. LTIMindtree is a global technology consulting and digital solutions company that helps enterprises reimagine business models and accelerate innovation. With a client base of over 700 companies and a team of 84,000+ professionals across 30+ countries, LTIMindtree delivers transformative outcomes across industries. A part of the Larsen & Toubro Group, LTIMindtree is at the forefront of delivering large-scale digital transformation programs worldwide.
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Business Standard
29-05-2025
- Business
- Business Standard
LTIMindtree shares gain 3% after launching NextEra JV with Aramco Digital
Shares of LTIMindtree rose over 3 per cent on Thursday after partnering with a unit of Aramco to announce the launch of NextEra, an information technology (IT) services company headquartered in Saudi Arabia. LTIMindtree's stock rose as much as 3.48 per cent during the day to ₹5,276 per share, the biggest intraday gain since May 12 this year. The stock pared gains to trade 1.6 per cent higher at ₹5,186 apiece, compared to a 0.02 per cent advance in Nifty50 as of 10:38 AM. Shares of the company have risen 13 per cent so far this month and have gained over 32 per cent from their April lows. The stock has fallen 6.8 per cent this year, compared to a 4.8 per cent rise in the benchmark Nifty50. LTIMindtree has a total market capitalisation of ₹1.5 trillion, according to BSE data. Track LIVE Market Updates Here Aramco Digital, LTIMindtree launch NextEra Aramco Digital, the of energy giant Aramco, and LTIMindtree have jointly launched NextEra, a new-generation IT services firm in Saudi Arabia. Formed under the strategic joint venture 'LTIM Aramco Digital Solutions for Information Technology Company', NextEra aims to drive Saudi Arabia's digital transformation in alignment with its Vision 2030 goals. The initiative is part of Aramco's Namaat Industrial Investments Program, which supports homegrown innovation and sustainable economic diversification. NextEra will offer advanced digital solutions powered by AI, automation, cloud services, and digital engineering, all tailored to enhance operational efficiency, decision-making, and customer experiences. 'This launch is a pivotal milestone in localising IT services and building a future-ready digital ecosystem,' said Nabil Al-Nuaim, Chairman of NextEra and CEO of Aramco Digital. 'Our partnership with LTIMindtree blends world-class tech expertise with deep regional insight. Through NextEra, we aim to drive innovation, enhance competitiveness, and contribute meaningfully to Saudi Arabia's digital journey.' LTIMindtree Q4 results India's sixth-largest IT services company reported a 2.6 per cent increase in profit in the fourth quarter of the financial year 2024-25 (Q4FY25) to ₹1,128.5 crore. On a sequential basis, the profit was up 3.9 per cent. Revenue was up 9.9 per cent to ₹9,771.7 crore during the same period last financial year. On a quarter-on-quarter basis, the revenue grew 1.1 per cent. Growth during the quarter was mainly driven by banking, financial services and insurance (BFSI) and manufacturing businesses, which grew at 12 per cent and 13.3 per cent year-on-year (Y-o-Y) respectively. The consumer business reported negative growth of 1.9 per cent Y-o-Y. Healthcare, lifesciences and public services was down 16.2 per cent Y-o-Y.
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Business Standard
28-05-2025
- Business
- Business Standard
LTIMIndtree, Aramco Digital to start IT services company in Saudi Arabia
LTIMindtree has tied up with Aramco Digital, the digital and technology arm of Saudi Arabia's oil behemoth Aramco, to start an IT services company named NextEra in the country, the companies said in a joint statement on Wednesday. The move will help LTIMindtree establish a stronger presence in the Middle East, a geography where Indian IT services providers have been focusing lately to boost their revenue. The company does not break up its revenue from the region, though it is bundled under 'rest of the world', which contributed about 12 per cent to the topline in the fourth quarter. 'Partnering with Aramco Digital to establish NextEra is a significant milestone in LTIMindtree's global expansion strategy. We are excited to bring our deep technical capabilities and cross-industry experience to support Saudi businesses in their digital journeys,' said Venu Lambu, NextEra Vice-Chairman and CEO-designate of LTIMindtree. The new company will also accelerate Saudi Arabia's digital transformation in alignment with the Kingdom's ambitious Vision 2030, which aims to diversify revenue sources beyond the traditional oil market. NextEra, which is banking on AI and automation, cloud services, and digital engineering as its core strengths, will offer solutions that enhance operational efficiency, enable intelligent decision-making, and deliver seamless customer experiences. 'The launch of NextEra marks a pivotal milestone in our efforts to localise IT services and contribute to advancing the Kingdom's digital landscape. This collaboration also reinforces Aramco Digital's commitment to accelerating digital progress across industrial and other strategic sectors, delivering sustainable impact, long-term value, and alignment with national priorities,' said Nabil Al-Nuaim, Chairman of NextEra and CEO of Aramco Digital. LTIMindtree CEO Debashis Chatterjee said in the fourth-quarter analyst call that the company was working with a leading digital firm in Saudi Arabia to provide end-to-end operations services for its hybrid cloud security platform. It also counts a Middle East oil and gas company and a nuclear energy firm among its clients.
