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NextEra Energy (NEE) Outpaces Stock Market Gains: What You Should Know

NextEra Energy (NEE) closed at $251.58 in the latest trading session, marking a +1.55% move from the prior day. This move outpaced the S&P 500's daily gain of 0.19%. Meanwhile, the Dow gained 0.31%, and the Nasdaq, a tech-heavy index, added 0.08%.

Prior to today's trading, shares of the parent company of Florida Power & Light Co. Had gained 3.3% over the past month. This has outpaced the Utilities sector's gain of 2.7% and lagged the S&P 500's gain of 3.72% in that time.

Investors will be hoping for strength from NEE as it approaches its next earnings release, which is expected to be January 24, 2020. On that day, NEE is projected to report earnings of $1.53 per share, which would represent year-over-year growth of 2.68%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.69 billion, up 6.77% from the year-ago period.

It is also important to note the recent changes to analyst estimates for NEE. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% lower within the past month. NEE is currently a Zacks Rank #4 (Sell).

Digging into valuation, NEE currently has a Forward P/E ratio of 27.41. Its industry sports an average Forward P/E of 19.59, so we one might conclude that NEE is trading at a premium comparatively.

Investors should also note that NEE has a PEG ratio of 3.43 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Utility - Electric Power was holding an average PEG ratio of 3.82 at yesterday's closing price.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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