Zacks Industry Outlook Highlights NextEra, Southern, Vistra and Exelon

Zacks12-03 18:00

For Immediate Release Chicago, IL – December 3, 2024 – Today, Zacks Equity Research discusses NextEra Energy NEE, The Southern Co. SO, Vistra Corp. VST and Exelon Corp. EXC. Industry: Electric Power ...

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SO, Vistra Corp. VST and Exelon Corp. EXC.\nIndustry: Electric Power\n...</p>\n\n<a href=\"https://finance.yahoo.com/news/zacks-industry-outlook-highlights-nextera-100000249.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1261432733.SGD","symbol_name":"Fidelity World A-ACC-SGD","start_time":0,"source_url":"https://finance.yahoo.com/news/zacks-industry-outlook-highlights-nextera-100000249.html","article_id":"2488916813","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/CskxMdPzOYYSFOwqIB4FAg--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/778e585f4fad99ed3508d02f63bda192"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2488916813","pubTimestamp":1733220000,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Chicago, IL – December 3, 2024 – Today, Zacks Equity Research discusses NextEra Energy NEE, The Southern Co. SO, Vistra Corp. 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SO, Vistra Corp. VST and Exelon Corp. EXC.\nIndustry: Electric Power\nLink: https://www.zacks.com/commentary/2377528/4-stocks-to-watch-from-the-prospering-electric-power-industry\nThe Zacks Utility – Electric Power industry players generate and supply electricity to millions of customers across the United States. The utilities have been transitioning toward clean sources of fuel and focusing on carbon emissions reduction. The support from the government is aiding the industry’s transition toward clean energy sources to produce electricity. Utilities are also focused on strengthening the grid and transmission and distribution infrastructure. The huge infrastructure of the utilities faces the impact of the hurricane season each year. Infrastructure enhancement around the year increases the resilience of the entire system, reduces outages and allows operators to restore power quickly to customers affected by storms.\nNextEra Energy, with its expanding clean power generation portfolio and customer base, renewable operations, and well-chalked-out capital investments to strengthen infrastructure, offers an excellent opportunity to stay invested in the utility space. Other utilities worth adding to your portfolio are The Southern Co. , Vistra Corp. and Exelon Corp.\nAbout The Industry\nThe Utility – Electric Power industry involves the generation, transmission, distribution, storage and sale of electricity to customers. A major portion of utilities’ earnings is generated from regulated operations. Unless there is any major weather variation, demand for the services provided by utilities remains steady, regardless of economic cycles. A very hot summer and cold winter season increases demand for electricity. A clear transition is evident in this industry, with more companies declaring zero-emission goals. The increasing usage of the Internet globally and an expected increase in artificial intelligence (AI) in the future will create a rise in demand for electricity. AI-based queries need substantially higher power than traditional Internet searches, music and photos. The declining interest rate is a tailwind for capital-intensive utilities.\n3 Electric Power Industry Trends in Focus\nInterest Rate Decline is a Tailwind: To maintain, upgrade, and expand operations, utilities approach capital markets for loans. Multiple rate hikes by the Federal Reserve took the benchmark rate to the 5.25-5.50% range, adversely impacting utility operators. The U.S. Federal Reserve has finally lowered the benchmark rate, with two rate cuts lowering the existing rates by 75 basis points and bringing down rates to a range of 4.50-4.75%. There is a possibility of another rate cut of 25 basis points in December. Capital-intensive domestic-focused utilities will benefit from the Fed’s decision to reduce interest rates. The drop in interest rates is a big positive for utility operators planning large investments in infrastructure upgrades.\nTransition Toward Cleaner Sources to Generate Power: The operators in the U.S. electric power sector are gradually moving toward cleaner sources of energy. Per the U.S. Energy Information Administration (EIA), the annual share of U.S. electricity generation from renewable energy sources will rise from 22% in 2023 to 23% in 2024 and touch 25% in 2025 as a result of the continuing addition of solar and wind-generating capacity. The passage of the Inflation Reduction Act (IRA) should support and accelerate the utilities’ transition toward clean energy sources. It has removed the uncertainties relating to federal incentives provided for the use of renewable sources. The act entails an opportunity for a wide range of low-cost clean energy solutions in a predictable way for a long time and will create earnings visibility.\nRising Demand and Price for Electricity: Per EIA, electricity supply volumes in the United States will increase 3% in 2024 from the 2023 level. A major portion of the electricity will be generated from clean energy sources. The development of large data centers in the United States is also increasing the electricity demand.\nData centers now consume 4% of the U.S. electricity generation, per an Electric Power Research Institute report, data centers will consume between 5% and 9% of U.S. electricity by 2030. EIA predicts the price of electricity to U.S. residential customers in 2024 to average 16.38 cents per kWh, about 2.4% higher than the 2023 level and increase further in 2025 by 1.9% from the 2024 levels. Rates are also predicted to increase for industrial and commercial customers. The increase in electricity prices in the near term should favor the utilities.\nZacks Industry Rank Indicates Bright Prospects\nThe group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates upbeat near-term prospects. The 57-stock Utility-Electric Power industry is housed within the broader Zacks Utilities sector and currently carries a Zacks Industry Rank #125, which places it in the top 50% of more than 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.\nThe industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate.\nBefore we present a few Utility - Electric Power stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and current valuation.\nElectric Power Industry Lags S&P 500 But Beats Sector\nThe Utility Electric Power industry has lagged the Zacks S&P 500 but outperformed its own sector over the past 12 months. The industry has gained 25.7% compared with its sector’s 23.3% rally. The Zacks S&P 500 composite has gained 34.1% in the same period.\nElectric Power Industry's Current Valuation\nOn the basis of EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) TTM, which is a commonly used multiple for valuing Utility Electric Power companies, the industry is trading at 15.11X compared with the S&P 500’s 18.75X and the Utility sector’s 15.76X.\nOver the past five years, the industry has traded as high as 21.47X, as low as 11.07X and at the median of 15.47X.\nElectric Power Industry Stocks to Keep an Eye On\nUtilities is a mature sector, and all the stocks selected from the Zacks Utility Electric Power industry have a market capitalization of more than $35 billion. One among the four currently sports a Zacks Rank #1 (Strong Buy), and the rest have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.\nVistra Corp.: Irving, TX-based Vistra, together with its subsidiaries, operates as an integrated retail electricity and power generation company. The company’s systematic capital investment plans and expanding customer base should further drive its performance. It expects to invest nearly $2.05 billion and $2.22 billion in 2024 and 2025, respectively.\nThe company pays dividends and executes share repurchases to increase its shareholders’ value. The Zacks Consensus Estimates for Vistra’s 2024 and 2025 earnings per share imply growth of 5.53% and 7.33%, respectively, in the last 60 days. Vistra Corp. sports a Zacks Rank #1 at present.\nNextEra Energy: Juno Beach, FL-based NextEra Energy is engaged in the generation, transmission, distribution and sale of electric energy. The company has a well-chalked-out capital deployment plan, which will be directed toward modernizing and strengthening the existing infrastructure and generating more electricity from clean sources to lower carbon emissions. The company has plans to invest more than $59.1 billion in the 2024-2028 period to strengthen its operations further.\nNEE’s long-term earnings growth is pegged at 8.12%. The current dividend yield for NEE is 2.62%, which is better than the Zacks S&P 500 composite’s yield of 1.43%. The Zacks Consensus Estimate for NextEra Energy’s 2024 earnings per share reflects growth of 0.3% in the last 60 days. NextEra Energy currently has a Zacks Rank #3.\nThe Southern Co.: Atlanta, GA-based The Southern Company, along with its subsidiaries, is engaged in the generation, transmission and distribution of electricity. The company also supplies natural gas to its customers. It expects capital deployment in excess of $48 billion in different projects from 2024 to 2028.\nSO’s long-term (three to five years) earnings growth is pegged at 6.8%. The current dividend yield for SO is 3.23%. The Zacks Consensus Estimate for Southern Company’s 2024 earnings is pegged at $4.03 per share, indicating growth of 0.3%. The Southern Company currently has a Zacks Rank #3.\nExelon Corporation: Chicago-based Exelon Corp. focuses on the transmission and distribution of electricity. EXC has plans to invest $34.5 billion in different projects in the 2024-2027 time period. EXC’s current dividend yield is 3.84%.\nEXC’s long-term earnings growth rate is pegged at 5.71%. The Zacks Consensus Estimate for Exelon’s 2024 earnings per share indicates growth of 0.4% in the last sixty days. Exelon currently has a Zacks Rank #3.\nWhy Haven't You Looked at Zacks' Top Stocks?\nSince 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.\nToday you can access their live picks without cost or obligation.\nSee Stocks Free >>\nMedia Contact\nZacks Investment Research\n800-767-3771 ext. 9339\nsupport@zacks.com\nhttps://www.zacks.com\nPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nExelon Corporation (EXC) : Free Stock Analysis Report\nNextEra Energy, Inc. (NEE) : Free Stock Analysis Report\nSouthern Company (The) (SO) : Free Stock Analysis Report\nVistra Corp. (VST) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2488916813"}