Dj Nextera Energy Inc. Stock Underperforms Tuesday When Compared To Competitors

Reuters

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Dj Vp Daggs Registers 4007 Of Nextera Energy Inc >Nee

Reuters

NextEra Energy

-0.03%

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Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?

Zacks

Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Fidelity MSCI Utilities Index ETF (FUTY) is a passively managed exchange traded fund launched on 10/21/2013.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $1.72 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. FUTY seeks to match the performance of the MSCI USA IMI Utilities Index before fees and expenses.

The MSCI USA IMI Utilities Index represents the performance of the utilities sector in the U.S. equity market.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 2.74%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Utilities sector--about 99.90% of the portfolio.

Looking at individual holdings, Nextera Energy Inc Common Stock Usd.01 (NEE) accounts for about 12.99% of total assets, followed by Southern Co/the Common Stock Usd5.0 (SO) and Duke Energy Corp Common Stock Usd.001 (DUK).

The top 10 holdings account for about 54.01% of total assets under management.

Performance and Risk

Year-to-date, the Fidelity MSCI Utilities Index ETF has added about 27.34% so far, and it's up approximately 34.26% over the last 12 months (as of 11/11/2024). FUTY has traded between $38.16 and $52.77 in this past 52-week period.

The ETF has a beta of 0.61 and standard deviation of 17.97% for the trailing three-year period, making it a medium risk choice in the space. With about 70 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Utilities Index ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FUTY is an excellent option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $6.60 billion in assets, Utilities Select Sector SPDR ETF has $18.16 billion. VPU has an expense ratio of 0.10% and XLU charges 0.09%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Nextera Energy Inc : Jefferies Cuts Target Price To $81 From $87

Reuters

NextEra Energy

-0.03%

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NRG Energy Third-Quarter Earnings Miss Estimates, Sales Beat

Zacks

NRG Energy

-0.19%

Pinnacle West Capital Corp.

NRG Energy, Inc. NRG reported third-quarter 2024 earnings of $1.85 per share, which missed the Zacks Consensus Estimate of $2.05 by 9.8%. However, the bottom line increased 14.2% from the year-ago quarter’s figure of $1.62.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Revenues of NRG Energy

Total revenues were $7.22 billion, which beat the Zacks Consensus Estimate of $2.98 billion by 142.1%. However, the top line declined 9.2% from the prior-year quarter’s level of $7.95 billion.

NRG Energy, Inc. Price, Consensus and EPS Surprise

NRG Energy, Inc. price-consensus-eps-surprise-chart | NRG Energy, Inc. Quote

Highlights of NRG’s Earnings Release

The company recorded adjusted EBITDA of $1.06 billion, up 7% from $0.99 billion recorded a year ago.

Operating costs and expenses amounted to $8.24 billion, up 11.5% from $7.39 billion in the year-ago quarter.

Operating loss totaled $812 million against income of $561 million in the year-ago period.

Through the third quarter of 2024, the company continued to repurchase shares in the open market, with $544 million completed as of Oct. 31, 2024. The company expects to complete the entire $925 million of 2024 repurchases by the end of the fourth quarter.

NRG’s Financial Highlights

As of Sept. 30, 2024, NRG had cash and cash equivalents worth $1.1 billion compared with $0.54 billion as of Dec. 31, 2023.

As of Sept. 30, 2024, long-term debt and finance leases amounted to $10.42 billion compared with $10.13 billion as of Dec. 31, 2023.

Cash provided by operating activities in the first nine months of 2024 totaled $1.35 billion against $0.46 billion cash used in the year-ago period.

Capital expenditures totaled $286 million in the first nine months of 2024 compared with $493 million in the year-ago period.

NRG’s Guidance

NRG Energy expects 2024 adjusted net income and adjusted EPS to be in the range of $1.235-$1.385 billion and $5.95-$6.75, respectively.

With the recasting of the amortization of capitalized customer acquisition costs, the 2024 adjusted EBITDA is now anticipated to be in the band of $3.655-$3.805 billion, up $130 million from that predicted earlier.

Free Cash Flow before Growth (FCFbG) is projected to be in the range of $1.975-$2.125 billion.

The company anticipates 2025 adjusted EBITDA and FCFbG to be in the range of $3.725-$3.975 billion and $1.975-$2.225 billion, respectively.

NRG’s Zacks Rank

The company has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

NextEra Energy, Inc.’s NEE reported third-quarter 2024 adjusted earnings of $1.03 per share, which beat the Zacks Consensus Estimate of 98 cents by 5.1%.

The company’s long-term (three to five years) earnings growth rate is 8.12%. The Zacks Consensus Estimate for 2024 earnings is pegged at $3.41 per share, which implies a year-over-year improvement of 7.6%.

Avangrid, Inc. AGR reported third-quarter 2024 earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate of 33 cents by 66.7%.

AGR’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for 2024 earnings is pegged at $2.34 per share, which calls for a year-over-year improvement of 12%.

Pinnacle West Capital Corporation PNW reported third-quarter 2024 earnings of $3.37 per share, which beat the Zacks Consensus Estimate of $3.35 by 0.6%.

PNW’s long-term earnings growth rate is 8.22%. The company delivered an average earnings surprise of 246.2% in the trailing four quarters.

Zacks Investment Research

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Vistra Third-Quarter Earnings and Revenues Surpass Estimates

Zacks

Pinnacle West Capital Corp.

+0.33%

Vistra Energy

-0.03%

Vistra VST reported third-quarter 2024 earnings of $5.25 per share, which beat the Zacks Consensus Estimate of $1.24 by 323.4%. The bottom line also increased 320% from the year-ago quarter’s figure of $1.25.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Total Revenues of VST

Sales for the quarter totaled $6.29 billion, which surpassed the Zacks Consensus Estimate of $4.96 billion by 26.7%. The top line also increased 53.8% from $4.09 billion recorded in the year-ago quarter.

Vistra Corp. Price, Consensus and EPS Surprise

Vistra Corp. price-consensus-eps-surprise-chart | Vistra Corp. Quote

VST’s Operational Highlights

Fuel, purchased power costs and delivery fees amounted to $2.2 billion, up 4.6% from the year-ago quarter’s $2.1 billion.

Operating costs for the quarter totaled $616 million, up 49.9% from the year-ago quarter’s $411 million.

Selling, general and administrative expenses amounted to $411 million, up 15.1% from the year-ago quarter’s $357 million.

Operating income totaled $2.59 billion compared with $0.83 billion in the year-ago quarter.

Interest expenses and related charges amounted to $332 million compared with $143 million in the prior-year period.

As of Nov. 4, 2024, Vistra executed $4.58 billion in share repurchases since November 2021. The company’s board of directors authorized an additional $1 billion of share repurchases, which is expected to be utilized by the end of 2026.

VST’s Financial Highlights

Cash and cash equivalents totaled $0.94 billion as of Sept. 30, 2024, compared with $3.2 billion as of Sept. 30, 2023.

Net cash flow provided by operating activities in the first nine months of 2024 totaled $3.2 billion compared with $4.6 billion a year ago.

Total capital expenditures for the first nine months of 2024 totaled $1.6 billion compared with $1.3 billion recorded a year ago.

VST’s Guidance

The company lowered its guidance for 2024 ongoing operations adjusted EBITDA and ongoing operations adjusted Free Cash Flow Before Growth (FCFbG) to $5.0-$5.2 billion and $2.65-$2.85 billion, respectively, excluding any potential benefit from the nuclear production tax credit.

It expects 2025 ongoing operations adjusted EBITDA and ongoing operations adjusted FCFbG to be in the band of $5.5-$6.1 billion and $3.0-$3.6 billion, respectively.

VST’s Zacks Rank

The company currently has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

NextEra Energy, Inc.’s NEE reported third-quarter 2024 adjusted earnings of $1.03 per share, which beat the Zacks Consensus Estimate of 98 cents by 5.1%.

Avangrid, Inc. AGR reported third-quarter 2024 earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate of 33 cents by 66.7%.

AGR’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for 2024 earnings is pegged at $2.34 per share, which calls for a year-over-year improvement of 12%.

Pinnacle West Capital Corporation PNW reported third-quarter 2024 earnings of $3.37 per share, which beat the Zacks Consensus Estimate of $3.35 by 0.6%.

PNW’s long-term earnings growth rate is 8.22%. The company delivered an average earnings surprise of 246.2% in the trailing four quarters.

Zacks Investment Research

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Is First Solar’s Earnings Drop a Golden Buying Opportunity?

MarketBeat

First Solar

-0.07%

SolarEdge Technologies

With a market capitalization of over $23 billion, First Solar Inc. is the biggest solar company in the U.S., where it has notched success with its low-cost and easily scalable Cadmium Telluride (CdTe)-based solar panel technology.

However, in late October 2024, the firm posted disappointing fiscal results for the third quarter, including both top- and bottom-line declines relative to the prior quarter. The drop in net sales to $0.9 billion from $1.0 billion and in earnings per diluted share to $2.91 from $3.25 was accompanied by a reduction in full-year net guidance on net sales, gross margin, net cash balance, and other metrics.

FSLR shares dipped marginally following the earnings release but remain up nearly 47% in the last year. As the Biden administration, which implemented the pro-solar Inflation Reduction Act, prepares to transfer power to the Trump administration in January, investors may question whether First Solar has the fundamentals to thrive, regardless of the regulatory landscape in 2025 and beyond.

Solar Continues to Up Capacity Despite Nuclear Focus

Most recently, energy demand from the booming AI and cloud computing spaces has prompted a shift in focus toward nuclear energy as a top contender in the green energy race. At the same time, the solar industry has been bogged down for multiple quarters with increases in component costs thanks to inflation, suppressed customer demand due to high interest rates, and similar issues.

However, investors should recognize that, despite these headwinds (some of which, including inflation and high rates, have already begun to dissipate), the solar industry is continuing to grow rapidly. In the second quarter, domestic module manufacturing capacity increased by nearly 50% to 31.3 GW. Installations in the U.S. increased 29% year-over-year for the quarter to a record-setting 9.4 GW of capacity. Increases were driven primarily by utility-scale installations as the residential, commercial, and community solar segments declined.

Uncertain Regulatory Environment

Though it remains to be seen how a second Trump presidency will impact the green energy sector, the new administration will likely focus efforts on oil and gas rather than sustainable energy options. The MAC Global Solar Energy Index, a benchmark for the broader solar industry, fell by more than 10% the day after the presidential election.

However, analysts suggest that the subsidies for solar energy included in the Inflation Reduction Act may continue into a new presidency, thanks to widespread support in several Republican-led states. There may also be a surge in grant funding related to the Act in the final two months of Biden's presidency, which could give solar stocks like SolarEdge Technologies Inc. and Enphase Energy Inc. a short-term boost.

It's also possible that other priorities in the Trump administration could negatively impact solar firms, such as prioritizing federal lands and waters for fossil fuel projects over wind or solar alternatives.

Aside from regulatory measures impacting the energy industry, trade and tariffs could also impact First Solar's business. Many solar companies source components from Asia, a practice that has occasionally led to supply chain issues and problems synchronizing with demand. If the Trump administration institutes sweeping tariffs as expected, First Solar may face significant cost increases or be forced to speed up its transition to manufacturing components in the U.S.

Major Upside Potential for FSLR

Despite late-October target price cuts by analysts at Bank of America and Morgan Stanley, analysts are still generally optimistic about First Solar's prospects. Analysts have projected earnings growth of almost 57%, and shares of FSLR still maintain a consensus price target of $281.13, for a potential upside of almost 43% compared to current levels.

First Solar's forward P/E ratio of 14.8 is lower than that of green energy competitors like Enphase and NextEra Energy Inc. . Still, in a tumultuous political moment that could have broad implications for the solar industry, investors also have reasons to be cautious before entering a new position in a company like First Solar.

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Dj Nextera Energy Inc. Stock Underperforms Tuesday When Compared To Competitors

Dj Vp Daggs Registers 4007 Of Nextera Energy Inc >Nee

Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?

Nextera Energy Inc : Jefferies Cuts Target Price To $81 From $87

NRG Energy Third-Quarter Earnings Miss Estimates, Sales Beat

Vistra Third-Quarter Earnings and Revenues Surpass Estimates

Is First Solar’s Earnings Drop a Golden Buying Opportunity?

Risk Disclosure