Is Trending Stock NextEra Energy Partners, LP (NEP) a Buy Now?

04.12.24 15:00 Uhr

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NextEra Energy Partners (NEP) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.Over the past month, shares of this limited partnership for clean-energy projects have returned -9.3%, compared to the Zacks S&P 500 composite's +5.8% change. During this period, the Zacks Alternative Energy - Other industry, which NextEra Energy Partners falls in, has gained 9.5%. The key question now is: What could be the stock's future direction?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.For the current quarter, NextEra Energy Partners is expected to post earnings of $0.60 per share, indicating a change of +271.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +6.8% over the last 30 days.For the current fiscal year, the consensus earnings estimate of $1.41 points to a change of +314.7% from the prior year. Over the last 30 days, this estimate has changed -4.3%.For the next fiscal year, the consensus earnings estimate of $1.54 indicates a change of +9.2% from what NextEra Energy Partners is expected to report a year ago. Over the past month, the estimate has changed +12.4%.Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, NextEra Energy Partners is rated Zacks Rank #3 (Hold).The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.In the case of NextEra Energy Partners, the consensus sales estimate of $347.33 million for the current quarter points to a year-over-year change of +49.7%. The $1.28 billion and $1.34 billion estimates for the current and next fiscal years indicate changes of +2.7% and +4.4%, respectively.Last Reported Results and Surprise HistoryNextEra Energy Partners reported revenues of $319 million in the last reported quarter, representing a year-over-year change of -13.1%. EPS of -$0.43 for the same period compares with $0.57 a year ago.Compared to the Zacks Consensus Estimate of $325.11 million, the reported revenues represent a surprise of -1.88%. The EPS surprise was -184.31%.Over the last four quarters, the company surpassed EPS estimates just once. The company could not beat consensus revenue estimates in any of the last four quarters.ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.NextEra Energy Partners is graded A on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about NextEra Energy Partners. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NextEra Energy Partners, LP (NEP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks

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Nachrichten zu NextEra Energy Inc

Analysen zu NextEra Energy Inc

DatumRatingAnalyst
13.08.2019NextEra Energy Equal WeightBarclays Capital
24.07.2018NextEra Energy Sector PerformScotia Howard Weil
18.07.2016NextEra Energy BuyMizuho
17.03.2016NextEra Energy BuyArgus Research Company
13.01.2016NextEra Energy BuyUBS AG
DatumRatingAnalyst
18.07.2016NextEra Energy BuyMizuho
17.03.2016NextEra Energy BuyArgus Research Company
13.01.2016NextEra Energy BuyUBS AG
17.11.2015NextEra Energy Sector OutperformScotia Howard Weil
05.10.2015NextEra Energy BuyDeutsche Bank AG
DatumRatingAnalyst
13.08.2019NextEra Energy Equal WeightBarclays Capital
24.07.2018NextEra Energy Sector PerformScotia Howard Weil
11.01.2011NextEra Energy sector performRBC Capital Markets
14.06.2005Update FPL Group Inc.: HoldDeutsche Securities
09.06.2005Update FPL Group Inc.: NeutralPrudential Securities
DatumRatingAnalyst

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