QS Research · Michael Burry's Scion Capital analyst template · 2006
NEXTERA ENERGY INC (NEE)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -46% · downside -63% · upside -28%
NEE is a high-quality regulated/contracted utility, but at $86.95 the market pays 18.8x TTM EV/EBITDA (N25), above every peer in the cited table (11.1x-15.4x, S1), and the 15.7x P/E (N28) is flattered because TTM net income of $11.64B (N15) exceeds EBIT of $8.65B (N12), leaving EV/EBIT at 32.7x (N26). Using the peer midpoint 13.25x on TTM EBITDA of $15.05B (N14) gives EV $199.4B, less net debt $100.38B (N21) and divided by 2,097.31M shares (N5), $47.2/share, -45.7%; downside at 11.1x is $31.8 (-63.4%) and upside at 15.4x is $62.7 (-27.9%). The catalysts that should remove the premium are the 2026-10-28 dividend growth cut to 6% through 2028 (S66) and the FPL rate-agreement challenge (S26), while Q3 2026 revenue missed and GAAP EPS was inflated by hedge gains (S74, S31). The call is short; even the highest peer multiple leaves the stock below today's price.
Key numbers
- Share price: $86.95
- Market cap: $182.36B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $26.90B
- EV / EBITDA (TTM): 18.8x
- P/E (TTM): 15.7x
- Price / book: 2.97x
The 15 boxes
- ✓ 1. Long-form business notes
NEE operates two principal businesses: FPL, a regulated Florida electric utility with more than 6 million customer accounts and 35,963 MW of net generating capacity at Dec 31 2025, and NEER, a competitive/contracted generation and transmission business with 37,505 MW of net generating capacity and about 35,627 MW contracted for a weighted-average remaining term of about 14 years. FY2025 revenue was $25.80B, operating income $8.28B, net income $6.83B and operating cash flow $12.48B; since FY2020 revenue rose from $17.00B and operating cash flow from $7.98B. The main changes since the oldest annual report are FPL's larger footprint, the Gulf Power merger into FPL, and the 2025 rate agreement with $945M then $705M base-rate increases and a 10.95% authorized ROE.
- ✓ 2. Competitive advantage
NEE's advantage is structural rather than brand-based: FPL is a regulated monopoly with 226 long-term Florida franchise agreements running to 2055 and an authorized regulatory ROE of 10.95% locked through at least December 2029 by the 2025 rate agreement, while NEER's edge rests on scale (~80 GW of net generation and storage at 12/31/2025), ~95% of net capacity committed under long-term contracts, and regulated transmission held on a cost-of-service basis. The XBRL record shows the asset base compounding: revenue $17.00B (FY2020) to $25.80B (FY2025), operating income $8.28B in FY2025 off a $10.24B FY2023 peak, operating cash flow $12.48B in FY2025, with D&A of $6.58B showing how capital-intensive the return is. The weak points are that returns are administrative (the 10-K states no guarantee FPL earns any particular return or recovers all costs), NEER competes primarily on price in a fragmented wholesale market, and the AI-driven productivity claims NEE cites as a competitive advantage sit in a risk factor saying they may not be realized.
- ✓ 3. 10-Q takeaways
Q3 2026 GAAP net income attributable to NEE was $4.775B, or $2.28/diluted share, inflated by $2,246M after-tax non-qualifying hedge gains; adjusted EPS was $1.24 vs $1.13. Revenue rose to $8,090M from $7,966M, with FPL retail base revenue up on new rates and customer growth while NEER revenue was dragged by commodity-hedge losses. Nine-month operating cash flow rose to $12,322M but capex was $27,554M, liquidity was $19.3B, and management reaffirmed 2026 adjusted EPS guidance of $3.92-$4.02. Backlog reached ~36.7 GW and the Dominion combination remains on track for 2H 2027.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.