DCF Studio

    NEE · NYQ · Utilities

    NextEra Energy, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 22.38

    Market price

    USD 85.03

    Implied upside

    -73.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 37.2% of revenue against depreciation of 23.3%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 22.38-73.7%
    Exit multiple
    USD 104.92+23.4%
    Market price
    USD 85.03

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn9bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 30.6bnUSD 34.2bnUSD 37.9bnUSD 41.5bnUSD 45.0bnUSD 48.3bnUSD 51.2bnUSD 53.7bnUSD 55.7bnUSD 57.0bn+7.2%
    EBITUSD 8.4bnUSD 9.4bnUSD 10.4bnUSD 11.4bnUSD 12.4bnUSD 13.3bnUSD 14.1bnUSD 14.8bnUSD 15.3bnUSD 15.7bn+7.2%
    NOPATUSD 7.3bnUSD 8.1bnUSD 9.0bnUSD 9.8bnUSD 10.7bnUSD 11.4bnUSD 12.1bnUSD 12.7bnUSD 13.2bnUSD 13.5bn+7.2%
    Add depreciation & amortisationUSD 7.1bnUSD 8.0bnUSD 8.8bnUSD 9.7bnUSD 10.5bnUSD 11.3bnUSD 11.9bnUSD 12.5bnUSD 13.0bnUSD 13.3bn+7.2%
    Less capital expenditureUSD -11.4bnUSD -12.5bnUSD -13.6bnUSD -14.7bnUSD -15.6bnUSD -16.4bnUSD -17.1bnUSD -17.6bnUSD -17.9bnUSD -18.0bn+5.2%
    Capex, % of revenue37.2%36.5%35.9%35.3%34.6%34.0%33.4%32.7%32.1%31.5%-
    Less increase in working capitalUSD 246.0mUSD 282.1mUSD 284.5mUSD 280.6mUSD 269.6mUSD 251.2mUSD 225.3mUSD 192.3mUSD 152.7mUSD 107.6m+8.8%
    Free cashflow to firmUSD 3.3bnUSD 3.9bnUSD 4.5bnUSD 5.2bnUSD 5.9bnUSD 6.5bnUSD 7.2bnUSD 7.9bnUSD 8.5bnUSD 9.0bn+11.9%
    Discount factor0.96550.90000.83900.78210.72900.67960.63350.59050.55050.5131-
    Present valueUSD 3.2bnUSD 3.5bnUSD 3.8bnUSD 4.0bnUSD 4.3bnUSD 4.4bnUSD 4.6bnUSD 4.6bnUSD 4.7bnUSD 4.6bn-
    Present Value Of The ForecastUSD 41.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.732Reported 0.600, pulled toward 1.0 (Blume)
    Cost of equity7.99%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a B+ rating at 1.8x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 5.1%.
    Market capitalisationUSD 178.3bn65.1% of capital
    Total debtUSD 95.6bn34.9% of capital, book value as a proxy
    Tax rate13.8%Effective, capped at statutory
    WACC7.28%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 22.38

    70% of EV

    Forecast FCFF, final year
    USD 9.0bn
    Capex at depreciation, working capital in reinvestment
    USD 13.5bn
    Less reinvestment at g/ROIC (34.4% of NOPAT)
    USD -4.6bn
    Capitalised
    USD 8.9bn
    ROIC (WACC floor)
    7.3%
    Terminal value, undiscounted
    USD 190.5bn
    Terminal value, discounted
    USD 97.8bn
    Enterprise value
    USD 139.4bn
    Less net debt
    USD 92.8bn
    Equity value
    USD 46.6bn

    Exit at 18.1x EBITDA

    Value per shareUSD 104.92

    87% of EV

    Terminal value, undiscounted
    USD 525.5bn
    Terminal value, discounted
    USD 269.7bn
    Enterprise value
    USD 311.3bn
    Less net debt
    USD 92.8bn
    Equity value
    USD 218.5bn

    Spread between methods: 130%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.28%55.4353.8952.3450.7949.25
    6.28%37.3636.1434.9133.6932.46
    7.28%24.3823.3822.3821.3820.38
    8.28%14.6213.8012.9712.1411.31
    9.28%7.056.355.654.954.25

    Outlined: this model. Green text: above today's price of 85.03. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year9.4%7.6%15.4%
    EBIT margin35.0%27.5%50.0%
    Discount rate-7.3%4.3%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.