NextEra (NEE) Pre-Q2 Earnings Analysis: Should You Buy or Hold?

Core Viewpoint - NextEra Energy (NEE) is expected to report improved earnings for the second quarter of 2024, despite a projected decline in revenues compared to the previous year [4][12]. Financial Performance - The Zacks Consensus Estimate for NEE's second-quarter revenues is $7.27 billion, indicating a 1.3% decline from the year-ago figure [1]. - The consensus estimate for earnings is pegged at 93 cents per share, reflecting a year-over-year growth of 5.7% [12]. - NEE's earnings have beaten the Zacks Consensus Estimates in the trailing four quarters, with an average surprise of 8.8% [13]. Earnings Expectations - NEE has an Earnings ESP of +1.44%, suggesting a favorable outlook for earnings performance [5]. - The earnings estimate has increased by 2.2% in the past 60 days, indicating positive sentiment [12]. - The company is expected to see annual earnings per share growth in the range of 6-8% due to rising demand from various sectors [16]. Market Position and Valuation - NEE is currently valued at a forward 12-month P/E multiple of 20.24, which is higher than the industry average of 13.63 [8]. - Competitors such as The Southern Company, PG&E, and American Electric Power are trading at lower forward P/E multiples of 19.54, 12.71, and 16.12, respectively [9]. Growth Drivers - The company is benefiting from improving economic conditions in Florida, leading to new customer additions and increased demand for services [10][15]. - NEE's Energy Resources unit is effectively meeting rising commercial and industrial customer demand through clean energy projects, with over 21 GW in the backlog of signed contracts [6][18]. - Strategic investments in clean energy production and partnerships, such as with Entergy Corporation for storage projects, are expected to enhance growth prospects [10]. Stock Performance - NEE's shares have gained 20.4% year to date, outperforming the industry's rally of 5.7% [17].