By Sam Boughedda
A Morgan Stanley analyst upgraded shares of NextEra Energy (NYSE:NEE) in a note Tuesday, increasing the price target to $99 per share from $94.
In a wide-ranging note, the analyst said they expect NEE to be one of the biggest beneficiaries of the Inflation Reduction Act, "which brings faster wind, storage, and battery storage growth for the next 10+ years."
He added: "The green hydrogen market is also poised to rapidly accelerate given new lucrative incentives and NEE is likely to be a major player in this nascent market — we incorporate $3/share of value for this opportunity. We think the renewables growth story has more room to run and with NEE trading at a valuation similar to the average of the last 5 years despite the improved renewables backdrop, we think there is attractive upside in the stock - Particularly with NEE only outperforming the UTY by 150bps since passage."
Meanwhile, a BofA analyst said in his note on Tuesday that NextEra Energy is the IRA's "biggest winner."
"The passage of the Inflation Reduction Act (IRA) creates expanded opportunities for renewables developers and investment in utilities broadly, but specifically for NextEra Energy (NEE), the legislation will both increase and lengthen the runway for renewables investments, accelerate investments in Hydrogen and other more novel investments, and likely drive a step up in solar investment at FPL," explained the analyst who reiterated a Buy rating and $94 price target on the stock.
"We see NEE as the best-positioned company in our universe to take advantage of the benefits that the bill provides," he added.