NextEra Energy : Analyst Recommendations and Credit Ratings

NextEra Energy’s 2Q15 Earnings on August 4: What to Expect

(Continued from Prior Part)

Brokerage ratings

NextEra Energy (NEE) has a Wall Street analyst consensus rating of 4.46, or “strong buy.” Twenty surveyed analysts give it a “buy,” five a “hold,” and only one a “sell” rating. The average 12-month price target is $116.68 against a market price of $101.95 as of July 8, implying a return of 14.4%.

In June, Morgan Stanley (MS) gave NEE a 12-month target price of $122 with an “overweight” rating. This was similar to its rating for Duke Energy (DUK). The rating signals “strong buy.”

In May, Credit Suisse (CS) gave NEE an “outperform” rating with a price target of $120. CS has given an “underperform” rating to Southern Company (SO) and a “neutral” rating to Duke Energy (DUK).

In April, Goldman Sachs (GS) rated NEE “buy/neutral” with a price target of $114.

Among the top five utilities, analysts expect NEE to give the second highest returns over the next 12 months based on the closing stock price as of July 8. Behind NEE is Exelon (EXC). This means NEE is expected to outperform most of its peers (XLU).

Credit ratings

Moody’s (MCO) rates NEE Baa1, or stable. Standard and Poor’s rates the company A-, or stable. Fitch rates NEE A-, or stable.

The bottom line

In the absence of major updates during 2Q15, NEE’s quarterly earnings may not have any big surprises. Weather has stayed warmer in 2Q15, which could result in some positive surprises, especially at NEE’s unregulated NextEra Energy Resources division.

The Fed’s communication related to a rate hike could be a key driver for NEE stock in the current quarter.

Browse this series on Market Realist:

• Part 1 - NextEra Energy to Publish 2Q15 Earnings on August 4

• Part 2 - A Look at NextEra Energy’s 1Q15 Revenue Performance

• Part 3 - NextEra Energy’s 1Q15 Profitability Measures