Increasing energy demands have compelled nations to choose between development fuelled by non-renewable energy and preventing the climate crisis from getting worse. The latter is leading companies to transition to renewable energy. NextEra Energy Inc (NYSE: NEE), an American energy company, was seeing a gradual drop in its share price for quite some time now. NEE stock was trading at the market price of $72.05 at the time of writing.
NextEra Energy Has Shown Strong Growth in Past Couple of Years
The company has a market capitalization of $145.8 Billion with 99.51 Billion free floating shares. NextEra has consistently added to its revenue for the past three years with $17.08 Billion in 2020 and $26.6 Billion last year. The electric utility giant generates its revenue solely from the United States, majority of which is generated from Florida Power and Light, its subsidiary, and rest from NextEra Energy Resources, its wholesale arm.
Recent Securities and Exchange Commission (SEC) filings show that Beach Investment Counsel Inc, an advisory firm, increased their position in NextEra Energy by 0.5%. They hold 1,309,815 NEE shares worth over $79 Million. Atria Wealth and SG Americas Securities LLC also elevated their positions in the company.
NEE Stock Price Performance
A gradual but negative momentum has persisted in NEE stock price since June 2022. The share value has maintained a support level at $70 bouncing off of it multiple times. However, it kept lowering the resistance. This indicates NEE shares have lost volatility throughout the period and are moving towards a choppy path.
Moving average convergence divergence (MACD) is moving into sellers’ territory. TRIX indicator and connors RSI, both are indicating a potential downtrend. Given the long term support NEE stock has held for nearly a year, a decline is possible, however, the price may deliver robust correction if the trend remains persistent.
TheStreet Quant Ratings maintains a buy rating for NEE shares. NextEra Energy has seen positive earnings over the past couple of years. Revenue growth, net income growth, expanding profit margins shows strength in the company financials. Additionally, it has a current profit margin of 56.05%.
Organizations in the energy sector are going green to meet carbon neutrality goals. Portfolio manager of investment firm Ecofin, Matthew Breidert, told TheStreet, a financial news provider, that they are focusing on electrification. It reduces costs and emissions. They are also looking to pour money in companies selling clean energy.
Covid-19 had triggered a sharp decline in the consumption of fossil fuels, however, electricity consumption remained the same. With increasing carbon emissions, energy companies would need to focus on renewable resources too. Chevron (NYSE: CVX), an oil and gas corporation, is already acting on its carbon reduction plans.
The United States is also working actively on electric vehicle (EV) infrastructure and plans to pour $7.5 Billion to boost the initiative. Still, the road to carbon neutrality is challenging because global oil demand may rise in future according to the International Energy Agency (IEA). However, a potential rise in oil prices would benefit the clean energy market.
IEA anticipates that China will become a major player in the clean energy sector, potentially accounting for over half of the market share in 2023 and 2024.
