Next Era (NEE) Trade of the Week
Next-Era (NEE) shares pulling back last week to the low-end of April value and back-testing a multi-week base breakout at $76.50. A move back above the 8-EMA can setup a run back to $80+ and then the prior highs around $85. NEE has a lot of bull flow in open interest including put sales at the May $75 and September $72.50 and $70 strikes as well as over 11,000 June $80 calls and 7,000 June $75 calls.
The $151.5B company trades 28.45X earnings, 8.85X sales, and 4X book with a 2% yield. NEE is coming off a strong quarter and remains well positioned for a number of major thematic trends within the industry including low-cost renewables, low-cost storage and hydrogen, the latter two expanding their TAM significantly. NEE continues to invest in retiring and replacing older, inefficient systems which will drive better rates and more efficient returns long-term. The company also has tailwinds from the infrastructure plan as investments towards renewables and energy infrastructure will benefit them. Analysts have an average target for shares of $79 with a Street High $100. Barclays raising estimates in mid-April calling the company the premium U.S. renewable developer. Short interest is 1.35%. Hedge fund ownership rose 0.35% in Q4.
Trade to Consider: Long the NEE June $80 Calls for $1.20