NextEra Energy, Inc.

New York Stock Exchange
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Somewhat Bearish -45

The Worst-Performing Stocks of 2023 (2026) - faurit.com

AI-generated analysis

📉 NextEra Energy (NEE) was among the worst-performing U.S. stocks in 2023, with shares falling 25.1%.

⚡ The Morningstar US Utilities Index dropped 7%, marking the worst returns of any sector in 2023.

🔥 Concerns regarding potential liabilities from Maui wildfires and regulatory issues in Florida weigh on NEE's outlook.

💰 Management expects NEE earnings to grow 7%-9% annually through 2025, supported by renewable energy backlog growth.

📊 Morningstar analyst Brett Castelli notes the market has lost confidence in management's ability to hit growth targets following a subsidiary's guidance cut.

🏛️ The upcoming Florida rate case, effective January 2026, remains a critical factor determining future utility rates and shareholder returns.

🌱 NEE continues to integrate renewable energy, efficiency, and EV capabilities despite regional regulatory headwinds limiting upside.

📈 Peer AES also struggled in 2023, falling 30.8%, reflecting sector-wide challenges with high interest rates.

Bullish Signals
  • Management expects NEE earnings to grow 7%-9% annually through 2025, driven by continued development of the renewable energy backlog.
  • NEE has a rapidly growing renewable energy business and a stronger balance sheet following the sale of non-core assets under CEO Andres Gluski's strategy.
  • The company is well-positioned to integrate renewable energy, energy efficiency, and electric vehicles over the next decade as clean energy goals expand.
  • Analyst Brett Castelli acknowledges NEE's strong position in the alternating current charging market despite challenges in direct current fast-charging.
Risk Factors
  • NEE shares fell 25.1% in 2023, ranking among the worst-performing U.S.-listed firms according to Morningstar analysts.
  • The utility sector posted the worst returns of any sector in 2023, with the Morningstar US Utilities Index dropping 7%.
  • Concerns persist regarding potential material capital losses due to wide-ranging and uncertain liabilities from the Maui wildfires.
  • Regulatory concerns in Florida are expected to persist until the company resolves its upcoming rate case effective January 2026.
  • The market has lost confidence in management's ability to hit growth targets following the announcement that NextEra Energy Partners is cutting growth expectations.
  • Some regulators in the Northeast have been stingy due to high customer rates, which limits upside for shareholders despite clean energy opportunities.
Full Analysis
Morningstar analysts identified NextEra Energy (NEE) as one of the worst-performing U.S.-listed stocks in 2023, with its shares falling 25.1%. The utility sector broadly struggled, posting the worst returns among all sectors with the Morningstar US Utilities Index dropping 7%, driven by high interest rates and supply chain issues that impacted clean energy companies. Analysts noted that NEE's performance was influenced by broader market headwinds affecting utilities, including concerns over regulatory environments in Florida and potential liabilities related to wildfires in Maui. Despite these challenges, the company maintains a strong balance sheet and a growing renewable energy business, with management expecting earnings growth of 7%-9% annually through 2025. The article highlights that while NEE faced significant declines, it is not alone among utilities; peers like AES also fell 30.8%. Morningstar strategists suggest investors should be comfortable with a wide range of outcomes due to potential liabilities and regulatory uncertainties, though they view the company's strategic focus on renewable energy as a positive long-term driver. Overall, the piece contextualizes NEE's poor performance within the larger landscape of 2023 market returns, contrasting it with the gains seen in the 'Magnificent Seven' stocks. The data provided is as of January 2, 2024, reflecting the end-of-year volatility that impacted utility valuations despite a strong overall market rally.