NextEra Energy Going to Report Q3 Earnings: How to Play the Stock?

Core Viewpoint - NextEra Energy is expected to report third-quarter 2025 results on October 28, with earnings estimated at $1.04 per share and revenues of $8.12 billion, reflecting a year-over-year earnings increase of 0.97% and a revenue increase of 7.27% [1] Earnings Performance - NextEra Energy has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 3.51% [2][3] Earnings Prediction Model - The current model does not predict an earnings beat for NextEra Energy, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [4] Factors Influencing Earnings - Florida Power & Light Company, a subsidiary of NextEra Energy, is benefiting from Florida's economic growth, leading to increased customer additions and maintaining electricity bills about 40% below the national average [6] - The company has a strong market position in Florida, supported by long-term franchise agreements that ensure operational stability and growth opportunities [7] - NextEra Energy's Energy Resources unit has a contract backlog exceeding 30 gigawatts, positioning it for strong revenue growth as new renewable energy and storage projects are executed [8] Market Demand and Performance - The company is capitalizing on rising energy demand, particularly from data centers and the Permian Basin, and continues to deliver affordable electricity through scalable renewable energy projects [9] - NextEra Energy's stock has gained 23.8% over the past six months, outperforming the Zacks Utility – Electric Power industry, which rose by 8.4% [10] Financial Metrics - The trailing 12-month return on equity (ROE) for NextEra Energy is 12.31%, surpassing the industry average of 10.35%, indicating efficient use of shareholders' equity [12] - The company is currently trading at a premium valuation with a forward 12-month P/E ratio of 21.24X compared to the industry average of 15.52X [14] Investment Thesis - NextEra Energy is benefiting from Florida's economic growth, which is driving demand and expanding its customer base, while investments in renewable energy enhance its capacity for reliable power [15] - The company maintains utility bills below the national average through disciplined expense management, contributing to consistent customer growth [15] Future Outlook - A decline in interest rates could benefit the capital-intensive utilities sector, including NextEra Energy, although the current premium valuation suggests that holding existing positions may be prudent [16] - The company is well-positioned for growth due to increasing demand for clean energy and a steadily expanding customer base [17]