EQUITY RESEARCH: NEXTERA ENERGY

This Master Final Work presents a comprehensive valuation of NextEra Energy, Inc. (NEE), a leading U.S.-based utility and renewable energy company, with the objective of determining its intrinsic value and providing an informed investment recommendation. The analysis applies a three-way approach valuation framework, combining Discounted Cash Flow (DCF) model, Discounted Dividend Model (DDM), and Relative Valuation based on trading multiples, including EV/EBITDA and P/E ratios, benchmarked against a selected peer group of utilities and renewable energy companies. The core DCF model yields a 2026F midyear target price of $74.59 per share, which is below the current market price of $72.19 as of 14th May 2025, suggesting an upside potential of 3.32% in 12-month horizon. As such, the analysis supports a Hold recommendation, particularly for short- to medium-term investors, with Low Risk. While the relative valuation provides more upside potential depending on peer comparables, it does not sufficiently offset the recommendation implied by the intrinsic valuation. The report also assesses NEE’s Environmental, Social, and Governance (ESG) profile, which remains a key differentiator in the utility and energy sector. The company has consistently ranked among ESG leaders due to its ambitious carbon reduction targets, large-scale investments in solar and wind infrastructure, and commitment to ethical governance practices. NEE’s ESG strategy enhances its resilience to regulatory risks and positions it favorably amid the ongoing energy transition, though this long-term value creation may not yet be fully captured in near-term price performance. While NEE exhibits strong fundamentals and industry-leading sustainability practices, the current market valuation appears to already reflect much of its growth potential. Consequently, the recommendation leans toward holding the stock, considering a 12-month investment time horizon