Regulated Electric · NYSE
Current Price
$94.17
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on NextEra Energy, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal, and natural gas facilities. It also develops, constructs, and operates long-term contracted assets that consists of clean energy solutions, such as renewable generation facilities, battery storage projects, and electric transmission facilities; sells energy commodities; and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets. As of December 31, 2021, the company had approximately 28,564 megawatts of net generating capacity; approximately 77,000 circuit miles of transmission and distribution lines; and 696 substations. It serves approximately 11 million people through approximately 5.7 million customer accounts in the east and lower west coasts of Florida. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in 2010. The company was founded in 1925 and is headquartered in Juno Beach, Florida.
ROIC (TTM)
4.0%
ROE (TTM)
15.2%
FCF Yield
1.20%
Based on trailing twelve-month data, NEE shows a free cash flow per share of N/A and a ROIC of 4.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 1.20% are important context metrics when evaluating NEE's stock valuation relative to peers.
The intrinsic value of NEE depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether NEE is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $94.17. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on NextEra Energy, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting NEE's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For NextEra Energy, Inc., this means projecting how much free cash flow the Regulated Electric will produce over the next 5-10 years, then discounting those amounts to today's dollars. NEE's ROIC of 4.0% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NEE, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
