Why NextEra Energy Stock and Its Yieldco Got Thrashed Today
A twin downgrade from a researcher put the stock of NextEra Energy (NYSE: NEE) and the units of its yieldco NextEra Energy Partners (NYSE: NEP) in the bear cave on Thursday. Both saw pronounced declines with Partners taking the worst of it -- the yieldco's unit price closed the day 12% lower, while NextEra Energy sank by 5%.
The researcher in question was Seaport Global Securities' Angie Storozynski. She reduced her recommendation on both NextEra Energy and NextEra Energy Partners to sell from the previous neutral. Storozynski's price targets on the two securities are $44 and $15.50 per share, respectively.
The analyst's driving concern with NextEra Energy is the quality and sources of its earnings, which make its valuations much less attractive -- Storozynski said they leave the stock priced at a 41% P/E premium to other electric utility stocks. She also cited the company's short-term debt load as being a factor behind the move.
Source Fool.com
