NextEra Energy: Strong Buy on Embedded Growth and Renewables Supercycle

We initiate on NEE with a Strong Buy, and $94 price target. NextEra Energy, Inc. is an electric

generator and deliverer operating across North America, balancing one of the nation’s largest regulated utilities with a high-growth renewables platform. Beneath the regulated utility guise, the business exists at the intersection of a capital base supercycle and a renewables supercycle precisely when consensus is pricing peak multiples and over-forecasting macro headwinds. Our view starts with tangible — and under-modeled — rate base levers at Florida Power & Light for consistent HSD% EBITDA growth despite sector-wide CoD angst. The January 2026 step-up (a $1.55Bn rate base addition) is already contractually embedded and only modestly underweighted in street estimates, and is a source of underappreciated operational leverage. This feeds into a strong $17Bn FY26E EBITDA (+3.9% CN) powered by NextEra’s unmatched 28GW renewables backlog and $37Bn interest rate hedging program. Where other utilities have to make choices amidst elevated real rates and QT, NEE avoids much of the financing volatility and tariff risk of peers. Our 16.5x EV/EBITDA target multiple aims to discipline exposure to an elevated premium (WAY lower than unsustainable 23x prints recently) but still reward a multi-year +DD growth story that should trade above peers. We admit multiple compression could happen sooner with persistent rate pressure; even so operational visibility, regulatory clarity and contracted renewables keeps downside skewed. At current levels, the risk/reward is outright positive; utility stability, secular renewables upside, and embedded