Does NextEra Energy earn the Wall Street seal of approval?



NextEra Energy’s coverage on Wall Street

In this series, we learned that NextEra Energy (NEE) stock reacted negatively following the company’s latest quarterly earnings release. Now, we’ll look at what Wall Street analysts and brokers have to say about the company.

NextEra is covered by 24 major analysts on Wall Street. Tracking key developments affecting NextEra and the power industry, these analysts recommend investors buy, sell, or hold a security based on their research.

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Most rate NextEra a “buy”

Approximately 67%, or 16, of Wall Street analysts tracking NextEra rate it a “buy.” Six analysts, or 25%, recommend a “hold” in NextEra. More than 90% of analysts tracking NextEra recommend either a “buy” or a “hold” rating in the stock. Only two Wall Street analysts rate it as a “sell.”

This shows analysts are unfazed by NextEra’s earning miss in 4Q14 and believe the company will do well in the future.

Analysts’ recommendations

When it comes to individual recommendations, Credit Suisse (CS) and Argus Research, give NextEra a target price of $120. NextEra currently trades near $105.80, implying a 13.4% return for the next 12 months.

Investment bank Barclays (BCS) gives NextEra the highest target price, with a 12-month target of $125. This target implies a ~18% return from NextEra’s current share price over the next 12 months.

Meanwhile, Sanford C. Bernstein & Co gives the most pessimistic target of $105 to NextEra.

NextEra’s average target price over the next 12 months is $116.2 per share. Evidently, Wall Street has decent expectations for the company.

For broader exposure to the utilities sector, you may also invest in the Utilities Select Sector Fund (XLU). NextEra accounts for 7.97% of XLU’s total portfolio. Meanwhile, Duke Energy (DUK) is the largest company in XLU’s portfolio.


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