NextEra Energy (NYSE:NEE) Q4 2025 Earnings call January 27, 2026 09:00 AM ET Company ParticipantsArmando Pimentel - CEOBrian Bolster - President and CEOJohn Ketchum - Chairman, President and CEOMark Eidelman - Head of Investor RelationsMark Hickson - EVPMike Dunne - EVP and CFOConference Call ParticipantsJulien Dumoulin-Smith - Managing Director and Senior Equity Research AnalystOperatorGood morning, and welcome to the NextEra Energy, Inc. fourth quarter and full year 2025 earnings conference call. All part ...

Core Viewpoint - Vistra plans to report its fourth quarter and full year 2025 financial and operating results on February 26, 2026, during a live conference call and webcast [1] Group 1: Financial Reporting - The financial results will be discussed in a live conference call and webcast starting at 10 a.m. ET (9 a.m. CT) [1] - Participants can access the live webcast via Vistra's website under "Investor Relations" and "Events & Presentations" [2] - A replay of the webcast will be available on Vistra's website for one year following the call [2] Group 2: Company Overview - Vistra is a leading Fortune 500 integrated retail electricity and power generation company based in Irving, Texas [3] - The company provides essential resources to customers, businesses, and communities from California to Maine [3] - Vistra focuses on reliability, affordability, and sustainability while operating a diverse power generation fleet including natural gas, nuclear, coal, solar, and battery energy storage facilities [3]

Company Overview - Vistra Corp. has a market cap of $53.1 billion and is a Fortune 500 integrated retail electricity and power generation company based in Irving, Texas, serving approximately 5 million customers across various segments [1] Financial Performance - Analysts expect Vistra to report an EPS of $2.45 for fiscal Q4 2025, representing a 114.9% increase from $1.14 in the same quarter last year [2] - For fiscal 2025, the anticipated EPS is $5.16, a decline of 26.3% from $7 in fiscal 2024, but expected to grow 65.7% year over year to $8.55 in fiscal 2026 [3] Stock Performance - VST stock has declined 13.7% over the past 52 weeks, underperforming the S&P 500 Index's 13.7% gain and the Utilities Select Sector SPDR Fund's 7.5% increase during the same period [4] - On January 16, shares of Vistra fell more than 7% due to pressure on power sector stocks following regulatory proposals that raised concerns about margin pressure and earnings uncertainty [5] Analyst Ratings - The consensus rating on VST stock is bullish, with a "Strong Buy" rating from 16 out of 19 analysts, and an average price target of $240.50, indicating a potential upside of 50.3% from current levels [6]

Core Viewpoint - Talen Energy Corporation is experiencing significant stock price movement and is expanding its asset base through a major acquisition, which is expected to enhance its financial performance and cash flow generation capabilities [1][2][3]. Group 1: Stock Performance - Talen Energy shares increased by 11.8% to close at $419.07, with trading volume significantly higher than usual [1]. - The stock has gained 6.5% over the past four weeks, indicating positive momentum [1]. Group 2: Acquisition Details - Talen Energy announced the acquisition of approximately 2.6 GW of natural gas generation assets in Ohio and Indiana for $3.45 billion, which will strengthen its position in the western PJM market [2]. - This acquisition is expected to enhance the company's capacity to support large-scale customers and is projected to be immediately accretive to adjusted free cash flow per share [3]. Group 3: Financial Expectations - The company is anticipated to report quarterly earnings of $2.82 per share, reflecting a year-over-year increase of 55.8%, with revenues expected to reach $690.13 million, up 47.8% from the previous year [4]. - The consensus EPS estimate for the quarter has been revised 31.6% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [5]. Group 4: Industry Context - Talen Energy operates within the Zacks Alternative Energy - Other industry, where Excelerate Energy, another company in the sector, has also shown positive stock performance [6]. - Excelerate Energy's EPS estimate has remained unchanged, reflecting a year-over-year decline of 27.5%, and it currently holds a Zacks Rank of 3 (Hold) [7].

Group 1 - Vistra Corp. is recognized as one of the 15 Dividend Stocks with low payout ratios and strong upside potential [1] - Morgan Stanley analyst David Arcaro raised the price target for Vistra Corp. to $228 from $225, maintaining an Overweight rating, highlighting that utility performance will be significantly driven by data centers, with growth potential expected in 2026 [2] - S&P Global Ratings upgraded Vistra Corp. to investment grade, indicating a positive shift in the company's perception since its spinoff from Energy Future Holdings Corp. nearly a decade ago [3] Group 2 - Approximately 35% of Vistra's generation capacity is located within the PJM Interconnection grid, which is experiencing strong demand from data centers, and about 96% of the expected generation for 2026 is hedged against fluctuating wholesale power prices [4] - Vistra's shares have more than quadrupled since the beginning of last year, reflecting increased investor interest driven by the demand for power plants that support energy-intensive data centers [4] - Vistra operates as an integrated retail electricity and power generation company, supplying essential power resources to customers [5]

Core Viewpoint - TC Energy Corporation has experienced significant changes in options trading and institutional investments, alongside a recent earnings report and dividend increase, indicating a dynamic market environment for the company [2][3][4]. Group 1: Options Trading and Institutional Investments - On Wednesday, TC Energy saw unusual options trading with 16,157 put options purchased, marking an increase of approximately 1,446% compared to the average volume of 1,045 put options [2]. - Goldman Sachs Group Inc. raised its holdings in TC Energy by 2,565.1% in Q1, now owning 16,306,187 shares valued at $769.82 million after acquiring an additional 15,694,336 shares [2]. - Norges Bank acquired a new position in TC Energy valued at $493.43 million in Q2 [2]. - American Century Companies Inc. boosted its position by 514.5% in Q3, now holding 6,491,799 shares worth $352.98 million after acquiring an additional 5,435,310 shares [2]. - Canada Pension Plan Investment Board increased its holdings by 34.2% in Q1, now owning 19,808,558 shares valued at $935.63 million [2]. - Public Sector Pension Investment Board raised its position by 2,573.3% in Q2, now owning 2,680,572 shares worth $130.60 million [2]. - Institutional investors currently own 83.13% of TC Energy's stock [2]. Group 2: Financial Performance - TC Energy reported earnings of $0.56 per share for the quarter, meeting consensus estimates, with revenue of $1.86 billion, below analysts' expectations of $2.63 billion [3]. - The company had a net margin of 23.86% and a return on equity of 10.61% [3]. - The previous year's earnings per share for the same quarter were $1.03 [3]. Group 3: Dividend Information - TC Energy declared a quarterly dividend of $0.85, an increase from the previous $0.61, representing an annualized dividend of $3.40 and a dividend yield of 6.1% [4]. - The payout ratio is currently at 106.47% [4]. Group 4: Analyst Ratings and Forecasts - Wall Street analysts have varied opinions on TC Energy, with ratings ranging from "sell" to "strong-buy" [5]. - The stock has a consensus rating of "Moderate Buy" and a price target of $84.00 according to MarketBeat.com [5].

Market Overview - The U.S. market has shown volatility, with returns of 19.2% for the Nasdaq Composite, 15.8% for the S&P 500, and 13.7% for the Dow Jones Industrial Average over the past year [1] - Concerns are rising regarding the moderating pace of the economy, influenced by a cooling labor market and high valuations in the technology sector [1] Federal Reserve Actions - The Federal Reserve cut its key interest rate by a quarter percentage point in December to support the job market and stimulate growth, with inflation trending near the 2% target [2] - The Fed has reduced borrowing costs three times this year, bringing the overnight borrowing rate to a range of 3.50-3.75% [2] Labor Market Conditions - The job market is showing signs of cooling, with softer hiring, rising unemployment at 4.6%, and a narrowing gap in job openings [3] - Nonfarm payrolls increased by 64,000 jobs in November after a decline of 105,000 jobs in October, the largest drop since December 2020 [3] Investment Opportunities - Investors looking to diversify can consider dividend-paying stocks, which indicate a healthy business model and tend to outperform non-dividend-paying stocks in volatile markets [4] - Notable dividend-paying companies include: - **Pentair (PNR)**: Declared a dividend of 27 cents per share with a yield of 1% and a payout ratio of 21% [5][6] - **nVent Electric (NVT)**: Declared a dividend of 21 cents per share with a yield of 0.8% and a payout ratio of 26% [7][8] - **CenterPoint Energy (CNP)**: Declared a dividend of 23 cents per share with a yield of 2.3% and a payout ratio of 51% [10][11][12] - **Marriott Vacations Worldwide (VAC)**: Declared a dividend of 80 cents per share with a yield of 5.5% and a payout ratio of 44% [10][13][14] - **PG&E (PCG)**: Declared a dividend of 5 cents per share with a yield of 0.7% and a payout ratio of 7% [15]

Core Insights - Home Depot is facing a challenging fourth quarter in fiscal 2025 due to intensified year-over-year weather comparisons, with management acknowledging that third-quarter performance fell short of expectations because of the lack of storm activity [1][3] - The absence of storm-driven demand is expected to create structural headwinds for revenues, leading to a revised forecast of slightly positive comparable sales for fiscal 2025, down from a prior estimate of 1% growth [3][8] Financial Performance - Comparable sales fell by 1.5% in October, primarily impacted by the absence of storms, indicating that weather-related demand issues may persist into the fourth quarter [2][8] - The Zacks Consensus Estimate for fourth-quarter revenues is projected at $38.18 billion, representing a decline of nearly 4% from the previous year [4][11] - For the current financial year, the sales estimate implies a year-over-year growth of 3.2%, while earnings per share are expected to decline by 4.5% [10][12] Market Position - Home Depot shares have decreased by 12.4% over the past year, compared to an 18.3% decline in the industry [7] - The company trades at a forward price-to-earnings ratio of 23.83, which is higher than the industry average of 21.58, and carries a Value Score of F [9] Industry Context - Other companies in the sector, such as Floor & Decor and Lowe's, are also experiencing similar structural demand challenges, with Floor & Decor reporting a 1.2% decline in comparable store sales and Lowe's showing a modest 0.4% increase amid consumer anxiety and spending pressures [5][6]

Core Viewpoint - GE Vernova (GEV) has experienced a significant share price increase of over 115% year to date in 2025, driven by strong demand from AI-related power consumption, electrification initiatives, and global decarbonization efforts [1] Group 1: Company Performance - GEV's portfolio includes power generation, grid transmission, and energy storage technologies, positioning the company for solid growth through capital deployment in data-intensive sectors and infrastructure modernization [2] - The company has outlined a positive medium-term outlook, projecting revenue to reach $52 billion by 2028, up from an expected $36 billion to $37 billion in 2025, with EBITDA margins targeted at approximately 20% by 2028 compared to 8%-9% for 2025 [3] - Management forecasts cumulative free cash flow of $22 billion from 2025 through 2028, after allocating nearly $10 billion for capital expenditures and R&D, indicating strong cash generation potential [4] Group 2: Market Position and Growth Catalysts - GE Vernova is expected to benefit from a multi-year energy investment cycle, with projected revenue between $41 billion and $42 billion in 2026, reflecting low double-digit year-over-year growth [6] - Adjusted EBITDA margins are anticipated to rise to 11%-13% as the company capitalizes on a rapidly expanding backlog and favorable pricing [6] - JPMorgan has raised its price target for GE Vernova to $1,000 per share, suggesting nearly 60% upside from the closing price of $625.30 on December 9 [5]

Core Viewpoint - Vistra Corp. is recognized as a promising investment in the AI sector, with KeyBanc initiating coverage with an "Overweight" rating and a price target of $217.00, reflecting a positive outlook on US power markets driven by Vistra's diversified assets and strong cash flow [1][4]. Group 1: Company Positioning - Analyst Sophie Karp highlights that Vistra's scale, diversified generation mix, and strong cash flow provide resilience and growth options in a tightening U.S. power market [2]. - The company is well-positioned to benefit from the long-term growth phase in the US power market, driven by AI data centers, industrial reshoring, and electrification [2][4]. - Vistra's dispatchable generation assets and strategic partnerships with major hyperscalers like Amazon and Microsoft enhance its ability to capitalize on increasing demand [3]. Group 2: Market Trends and Policy Support - The favorable policy environment prioritizing reliability and energy security further strengthens Vistra's portfolio value [3]. - The company is expected to maintain financial flexibility while funding growth initiatives, positioning it advantageously in the evolving market landscape [3][4]. - The base case analysis excludes potential upside from initiatives such as battery storage or hyperscale partnerships, which could unlock additional value if executed successfully [4].