NextEra Energy Partners, LP Common Units representing limited partner interests (NEP) Company Bio
NextEra Energy Partners LP acquires, owns, and operates contracted clean energy projects. It owns interests in wind and solar projects in North America. The company was founded in 2014 and is based in Juno Beach, Florida.
NEP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for NextEra Energy Partners LP with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that NextEra Energy Partners LP ranked in the 68th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 234.33%. The most interesting components of our discounted cash flow analysis for NextEra Energy Partners LP ended up being:
The company's balance sheet shows it gets 40% of its capital from equity, and 60% of its capital from debt. Notably, its equity weight is greater than merely 20.1% of US equities in the Utilities sector yielding a positive free cash flow.
NextEra Energy Partners LP's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
NextEra Energy Partners LP's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 0.86. This coverage rate is greater than that of merely 22.36% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Utilities that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as NEP, try SPH, BIP, TAC, BEP, and CIG.