Credit Suisse Group AG Initiates Coverage on NextEra Energy Partners LP (NEP)
Stock analysts at Credit Suisse Group AG started coverage on shares of NextEra Energy Partners LP (NYSE:NEP) in a research report issued on Thursday. The firm set an “outperform” rating and a $33.00 price target on the stock. Credit Suisse Group AG’s price target suggests a potential upside of 30.69% from the company’s previous close.
The analysts wrote, “We initiate coverage of NextEra Energy Partners (NEE Partners) with an Outperform rating and a $33 target price. We see compelling upside from best-in-class dividend growth visibility, improving acquisitions returns, and near-term capital structure flexibility. Leader of the Pack: We view NEE Partners as the premier vehicle in the YieldCo sector to finance the acquisition of long-term and heavily contracted cash flows. Investments primarily in renewable energy assets provide attractive dividend growth for shareholders. Growth visibility is driven by over $2 billion in EBITDA originated by its parent company NextEra Energy and available for dropdown to NEE Partners at increasingly attractive returns. A Plethora of Catalysts to Unlock Value: These include (1) 1Q17 dropdowns at attractive returns and requiring limited equity, (2) NET pipeline expansion update (February 2017), (3) PTC repowering opportunities for wind PPA projects and development of NextEra Energy’s wind and solar pipeline, and (4) growth opportunities in contracted energy storage assets. Risks: The following represent risks to our Outperform rating: (1) rising interest rates, (2) asset performance, (3) capital market needs and access, and (4) relative cost of capital disadvantage given IDR splits. Valuation: We project an above-consensus dividend CAGR of 16% through 2020 and believe NEP’s growth prospects at the end of our forecast period will be comparable with today. Our dividend yield based valuation methodology reflects that view.””
NEP has been the subject of a number of other research reports. Barclays PLC restated a “buy” rating and issued a $34.00 price target on shares of NextEra Energy Partners in a research report on Monday, September 12th. Zacks Investment Research upgraded NextEra Energy Partners from a “sell” rating to a “hold” rating in a research report on Wednesday, November 2nd. Avondale Partners cut NextEra Energy Partners from an “outperform” rating to a “market perform” rating in a research report on Thursday, July 28th. Finally, Oppenheimer Holdings Inc. assumed coverage on NextEra Energy Partners in a research report on Thursday, September 8th. They issued an “outperform” rating and a $34.00 price target for the company. Four equities research analysts have rated the stock with a hold rating and five have assigned a buy rating to the company’s stock. The company has an average rating of “Buy” and an average target price of $31.44.
Shares of NextEra Energy Partners (NYSE:NEP) opened at 25.25 on Thursday. The company has a 50-day moving average of $27.31 and a 200 day moving average of $29.02. The stock has a market capitalization of $1.37 billion, a price-to-earnings ratio of 21.60 and a beta of 1.33. NextEra Energy Partners has a one year low of $22.25 and a one year high of $32.42.
NextEra Energy Partners (NYSE:NEP) last released its quarterly earnings data on Monday, October 31st. The company reported $0.62 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.33 by $0.29. The firm earned $188 million during the quarter, compared to analysts’ expectations of $195.67 million. NextEra Energy Partners had a return on equity of 2.47% and a net margin of 6.79%. During the same quarter in the prior year, the business posted $0.05 earnings per share. Equities research analysts forecast that NextEra Energy Partners will post $1.14 earnings per share for the current fiscal year.
The firm also recently declared a quarterly dividend, which was paid on Monday, November 14th. Shareholders of record on Tuesday, November 8th were paid a $0.341 dividend. This represents a $1.36 dividend on an annualized basis and a yield of 5.40%. This is a positive change from NextEra Energy Partners’s previous quarterly dividend of $0.33. The ex-dividend date was Friday, November 4th. NextEra Energy Partners’s dividend payout ratio (DPR) is presently 108.73%.
A number of hedge funds have recently modified their holdings of the company. Cubist Systematic Strategies LLC raised its stake in shares of NextEra Energy Partners by 1.0% in the second quarter. Cubist Systematic Strategies LLC now owns 3,304 shares of the company’s stock worth $100,000 after buying an additional 32 shares during the last quarter. Quantbot Technologies LP acquired a new stake in shares of NextEra Energy Partners during the third quarter worth about $126,000. Panagora Asset Management Inc. acquired a new stake in shares of NextEra Energy Partners during the third quarter worth about $282,000. Global X Management Co. LLC raised its stake in shares of NextEra Energy Partners by 15.5% in the third quarter. Global X Management Co. LLC now owns 11,261 shares of the company’s stock worth $315,000 after buying an additional 1,514 shares during the last quarter. Finally, Fox Run Management L.L.C. acquired a new stake in shares of NextEra Energy Partners during the second quarter worth about $355,000. 71.52% of the stock is currently owned by hedge funds and other institutional investors.
About NextEra Energy Partners
Nextera Energy Partners, LP is a limited partnership formed to acquire, manage and own contracted clean energy projects. The Company, through its limited partnership interest in NextEra Energy Operating Partners, LP (NEP OpCo), owns a portfolio of contracted renewable generation assets consisting of wind and solar projects, as well as approximately seven contracted natural gas pipeline assets.
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