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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its outlook on NextEra Energy (NYSE:NEE), reducing the stock’s price target from $73.00 to $69.00, while maintaining a Neutral rating. Mizuho’s analysis indicates that NextEra Energy is poised to achieve earnings growth at or near the higher end of its projected 6%-8% range. The firm acknowledges that NextEra Energy has effectively managed concerns regarding tariffs and tax credits, two significant factors in the assessment. According to InvestingPro data, the company, currently valued at $138.4 billion, appears slightly overvalued based on its Fair Value analysis, with analysts’ price targets ranging from $52 to $103.
NextEra Energy’s management has taken steps to mitigate tariff exposure by being proactive with its supply chain over recent years, leveraging the company’s substantial size and scale. Additionally, management is confident there is sufficient bipartisan support in Congress to sustain the Investment Tax Credit ( ITC (NSE:ITC)) and its transferability, which are key components of the Inflation Reduction Act (IRA).
The Florida Power & Light (FPL) rate case is currently underway, with staff and intervenor testimony expected in June. A potential settlement could be negotiated by mid-summer. However, the possibility of a repeal of IRA tax credits presents a risk, prompting Mizuho to remain on the sidelines with a Neutral rating.
The reduction in the price target to $69.00 is attributed to current market multiples, reflecting a more cautious valuation approach amidst the prevailing market conditions. The adjustment by Mizuho follows NextEra Energy’s efforts to address critical operational challenges and navigate the legislative environment impacting its business.
In other recent news, NextEra Energy reported its financial results for the first quarter of 2025, surpassing analysts’ expectations for earnings per share (EPS) but missing revenue forecasts. The company achieved an EPS of $0.99, exceeding the projected $0.91, while revenue was $6.25 billion, falling short of the anticipated $6.71 billion. Despite the revenue miss, the company’s Florida Power & Light and Energy Resources segments showed strong growth, with significant investments in solar and renewable energy projects. NextEra Energy plans to invest $50 billion from 2025 to 2029, aiming to expand its renewable energy capacity significantly. Additionally, the company expects to grow dividends by roughly 10% annually through 2026. The company’s leadership transition was also highlighted, with Brian Bolster taking over as President and CEO of NextEra Energy Resources, while Mike Dunn is set to become the CFO of NextEra Energy. Analysts from Wolfe Research and Jefferies expressed interest in the company’s tariff exposure and transferability of tax credits, with NextEra’s executives assuring strong contractual protections and a positive outlook. The company remains optimistic about meeting its financial targets despite challenges related to tariffs and supply chain complexities.
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