NEE - Embedded Expectations Analysis - 2020 09 22
NextEra Energy, Inc. (NEE:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 37.0x Uniform P/E, implying bullish expectations for the firm. However, management may have concerns about renewable energy projects, the Gulf Power and FPL merger, and their ability to sustain growthSpecifically, management may lack confidence in their ability to sustain annual growth, the adjusted EBITDA run rate, and earnings per share. Furthermore, they may have concerns about the distribution resumption from their Desert Sunlight projects and the potential of their wind and solar projects. Management may also lack confidence in their ability to continue growing their renewable business under the Trump administration, produce and launch new renewable products for their customers, and obtain approval for internal reorganization through the Florida Power & Light (FPL) and Gulf merger. Moreover, they may have concerns about the continued decline in Gulf Power's retail sales due to unfavorable weather conditions, the impact of the pandemic on FPL's performance, and the repercussions of retiring their 847-megawatt coal-fired plant
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.
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