Erste Group moved NextEra Energy (NYSE: NEE) to a Buy rating from Hold on Tuesday, pointing to improved expectations for the company’s long-term revenue and earnings trajectory. The upgrade follows a year in which the utility delivered notable share price appreciation, returning 39.56% over the trailing 12 months.
In research notes, Erste Group analyst Hans Engel emphasized that NextEra expects earnings per share to grow at a compound annual growth rate of 8% or more through 2032, measured from a 2025 baseline. The company itself is targeting a similar growth pace out to 2035. Engel framed the revised stance as a reflection of strengthened financial targets and a clearer pathway to sustained expansion.
The analyst attributed part of the confidence to persistent increases in electricity demand. Engel also highlighted NextEra’s operating efficiency relative to peers, noting that return on equity and operating margin metrics are materially higher than those of competitors. Supporting figures referenced in the research show a return on common equity of 13% and a gross profit margin of 62.27%, as reported in InvestingPro data.
Erste Group summed up the outlook succinctly: "The stock has further upside potential due to the improved outlook," the analyst wrote in the research note. The upgrade signals the firm’s view that improved targets and competitive operational metrics bolster NextEra’s investment case within the utility sector.
Recent company results provide context for the rating change. NextEra reported fourth-quarter results for fiscal 2025 with earnings per share of $0.54, slightly under the consensus forecast of $0.56. Revenue for the quarter came in at $6.5 billion versus an expected $6.78 billion. Alongside the earnings release, NextEra announced a 10% increase in its quarterly dividend to $0.6232 per share, with the dividend payable on March 16, 2026 to shareholders of record on February 27, 2026. The firm has maintained dividend payments for 55 consecutive years.
Strategically, NextEra has entered a partnership with Xcel Energy aimed at addressing growing needs for power generation resources, with specific attention to data center demand. The collaboration will focus on enhancing generation, storage, and transmission investments within Xcel Energy’s service territories. Erste Group noted these strategic steps as consistent with the company’s efforts to strengthen its market position and capture growth opportunities tied to rising electrification.
Sectors impacted: Utilities, energy infrastructure, and data center power supply chains.