Following NextEra Energy’s (NEE) 4Q15 earnings, Wall Street analysts have a one-year price target of $119 for the company against its current market price of $108 as of January 28, 2016. This comes to a possible upside of 10% in one year.
Of the 25 analysts tracking NextEra, five analysts are recommending a “hold” on the stock, while 20 analysts are recommending a “buy.” No analysts have “sell” recommendations for NEE as of January 28, 2016.
American Electric Power (AEP) also reported its quarterly earnings on January 28, 2016. It has a one-year price target of $62.5. AEP is currently trading at $59.4 as of January 28. NextEra Energy’s peer Southern Company (SO) has a one-year price target of $47.2, and its current market price is $48.
Exelon (EXC) has a robust possible upside of 20% in one year, with a price target of $33. It’s trading at $27. EXC and SO will report their 4Q15 earnings on February 3, 2016.
NEE management is aiming to achieve 6%–8% earnings growth in the next couple of years. NextEra Energy’s capital spending plan of $15 billion in the next five years focuses on grid modernization. Thus, it may improve its transmission efficiency. This modernization also makes a strong case for rate increases.
NEE’s major growth driver in 2015 was the growth of its regulatory capital. We may see continued investments from NEE into its service territories in 2016.
NextEra Energy Resources may continue to expand its renewable fleet in order to strengthen its competitive generation segment. NextEra’s yieldco, NextEra Energy Partners (NEP), acquired 1,200 megawatts of contracted renewable (PBW) ownership in 2015.
NEP is also expected to contribute to NextEra Energy Resources via healthy renewable generation assets.