NextEra Energy price target raised to $78 from $74 at Mizuho on rate settlement

Investing.com - Mizuho (NYSE:MFG) has raised its price target on NextEra Energy (NYSE:NEE) to $78.00 from $74.00 while maintaining a Neutral rating on the stock. The utility giant, currently trading at $76.08 with a market capitalization of $156.7 billion, has demonstrated remarkable dividend consistency, having raised its dividend for 29 consecutive years. According to InvestingPro analysis, the stock appears fairly valued at current levels.

The price target increase follows NextEra Energy’s Wednesday announcement providing details of a rate settlement previously disclosed on August 8. The settlement includes an ROE range of 9.95%-11.95%, representing a 15 basis point improvement to the current plan. With analyst targets ranging from $52 to $103 and a P/E ratio of 26.5, investors seeking deeper insights can access comprehensive valuation metrics through InvestingPro’s detailed research reports.

Key elements of the four-year plan include an unchanged equity ratio of 59.6% and two annual revenue increases: $945 million for the first rate year and $705 million for the second rate year. The plan also maintains the reverse surplus amortization mechanism, renamed to RSM, comprised of $1.15 billion of deferred tax liabilities.

Mizuho noted that while the Office of Public Counsel is not a party to the settlement, the firm believes the settlement will gain approval from the Public Service Commission. The research firm pointed out that Florida Power & Light, a NextEra subsidiary, has settled every rate case since 2005.

The updated price target is based on current market multiples, according to Mizuho, which expects the PSC to issue a procedural schedule on Friday.

In other recent news, NextEra Energy has been in the spotlight for several developments. The company, through its subsidiary Florida Power & Light, filed a four-year rate settlement agreement with state regulators, which reduces its original revenue request by about 30%. This agreement, pending approval, aims to keep residential customer bills below national averages while introducing a modest increase starting January 2026. Additionally, NextEra Energy completed the remarketing of $2 billion in debentures, setting the interest rate at 4.685% per year, with interest payments beginning in 2025. On the investment front, Melius Research initiated coverage on NextEra Energy with a Buy rating, citing its strong position in renewable energy. UBS also maintained its Buy rating and $84 price target, expressing confidence in the company’s long-term earnings growth potential. In terms of shareholder returns, NextEra Energy declared a quarterly dividend of $0.5665 per share, payable in September 2025. These developments reflect NextEra Energy’s ongoing strategic initiatives and financial maneuvers.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.