Morningstar | Renewable Energy and Regulated Capital Investment Drive NextEra Energy's Earnings
We are reaffirming our $156 fair value estimate, along with our narrow economic moat and stable moat trend ratings, after NextEra Energy reported third-quarter operating earnings per share of $2.18, compared with $1.85 in the year-ago period.Management reaffirmed its 2018 EPS guidance of $7.45-$7.95, in line with our estimate. We continue to forecast that NextEra Energy will attain the top end of its 6%-8% growth expectations through 2021, supporting our forecast for industry-leading 12% annualized dividend growth.
NextEra's best-in-class management team continues to build out its renewable portfolio backlog. Its renewable energy investment backlog stands at 9,300 megawatts, up 2,100 MW in the quarter. This includes 650 MW of wind repowering. In a sign of the long runway of battery storage opportunities available to NextEra, the company signed 120 MW of battery storage projects in the quarter. We expect this to be a significant growth driver for NextEra Energy Resources early to mid-next decade. We remain confident NextEra will deliver at the high end of its 10.1-16.5 gigawatt development plan from 2017 to 2020.
Growth in regulatory capital, up 13% quarter over quarter, drove earnings growth at FPL. Regulated capital growth opportunities remain strong, with the 1,750 MW Okeechobee Clean Energy Center on track for mid-2019 completion. The highly constructive Florida regulatory environment allows automatic base rate increases. We continue to see a long runway of capital growth opportunities with regulated solar new build and additional storm hardening, given Florida's recent storm activity.
NextEra Energy's acquisition of Gulf Power and natural gas plants is on schedule to close in the first half of 2019, with the Florida City Gas acquisition closing earlier this year. The acquisitions aim to increase NextEra's regulatory capital in highly constructive Florida and create additional capital growth opportunities.
NextEra Energy is a holding company, engaged in electric power and energy infrastructure. The company has two principal businesses, Florida Power & Light Company (FPL) and NextEra Energy Resources, LLC (NEER). FPL is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. FPL provides service to its electric customers through a transmission and distribution system that links its generation facilities to its customers. NEER, through its subsidiaries, owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets primarily in the United States and Canada.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.