BMO lifts NextEra Energy stock target to $84, keeps Outperform

On Thursday, BMO Capital Markets maintained its positive stance on NextEra Energy (NYSE:NEE) by increasing the stock's price target to $84.00, up from the previous $82.00. The firm continues to recommend an Outperform rating for the energy company's shares. According to InvestingPro data, analyst targets for NEE range from $58.00 to $102.80, with the current stock price near $69.17 suggesting potential upside. The company's current market capitalization stands at $142.2 billion.

The adjustment in the price target follows BMO Capital's routine quarterly review. Analysts at the firm have revised their fourth-quarter 2024 earnings estimate for NextEra Energy to $0.54 per share, a slight increase from the $0.52 per share anticipated for the fourth quarter of 2023. This revision is attributed mainly to the robust performance expected from new investments made by NextEra Energy Resources (NEER), a subsidiary of NextEra Energy. The company has demonstrated strong financial health, with InvestingPro highlighting its 29-year streak of dividend increases and maintaining payments for 54 consecutive years.

The Outperform rating is reaffirmed by BMO Capital, indicating the analysts' expectation that NextEra Energy's stock will perform better than the overall market in the near term. The firm's confidence in the company is reflected in their updated mark-to-market (M-T-M) sum-of-the-parts (SOTP) valuation, which supports the raised target price.

NextEra Energy, known for its significant investments in renewable energy and infrastructure, is anticipated to continue benefiting from these strategic investments. The company's focus on expanding its renewable energy portfolio aligns with a broader industry trend toward sustainable and clean energy solutions. With an EBITDA of $14.58 billion and a solid gross profit margin of 62.1%, NextEra Energy demonstrates strong operational efficiency. InvestingPro subscribers can access detailed financial analysis and additional insights through comprehensive Pro Research Reports, available for over 1,400 US stocks including NEE.

The updated price target and sustained Outperform rating signal BMO Capital's belief in the ongoing growth potential of NextEra Energy. Investors will be watching closely to see if the company's performance aligns with these expectations in the forthcoming quarters.

In other recent news, NextEra Energy has experienced several significant developments. Jefferies analyst Julien Dumoulin-Smith adjusted the price target for NextEra Energy shares, bringing it down from $81.00 to $77.00 while maintaining a Hold rating. The company has also successfully completed a sale of equity units totaling $1.5 billion, led by J.P. Morgan Securities LLC, Mizuho (NYSE:MFG) Securities USA LLC, and Goldman Sachs & Co. LLC.

NextEra Energy has planned a base rate proceeding for early 2025, following the expiration of the current base rate settlement agreement established in 2022. This development is part of the company's forward-looking statements, subject to various risks and uncertainties. The company's quarterly originations are anticipated to be around 3 gigawatts, with a current yield of 2.91%.

The company's future outlook is said to be highly reliant on renewable energy policies and the outcome of the Florida rate case. Moreover, the company's ability to recover costs and achieve a reasonable return on invested capital through regulatory mechanisms is subject to political, regulatory, operational, and economic considerations.

The Biden administration's decision to ease tax-credit rules for hydrogen production has led to increased shares for Constellation Energy (NASDAQ:CEG) and other nuclear power-focused companies, a development expected to benefit these companies in the long term, according to analysts at Evercore ISI. These are the latest events in a series of recent developments for NextEra Energy.

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