Wall Street analysts still seem positive about NextEra Energy (NEE), particularly because it’s risen so much compared to last year’s levels, resulting in its premium valuation.
On June 6, 2017, among the 16 analysts tracking NextEra Energy, four recommended “strong buys,” ten recommended “buys,” and two recommended “holds” on the stock.
NextEra Energy has an analyst consensus price target of $142.71, compared to its current market price of $141.92. This target implies a potential upside of 0.6% over the next year.
Southern Company (SO) has a price target of $50.81, compared to its current market price of $50.79, indicating flattish movement over the next year. You can read more about Southern Company in When Will Southern Company Emerge from Its Power Plant Woes?
As US interest rates slowly normalize, we could see growing softness in the utility sector (XLU). In June 2016, US utilities were trading at a yield premium of ~200 basis points to US Treasuries (TLT). However, as it stands in mid-2017, this gap has contracted to less than 100 basis points.