JPMorgan Upgrades NextEra Energy Partners (NEP) to Neutral

JPMorgan analyst Mark Strouse upgraded NextEra Energy Partners (NYSE: NEP) from Underweight to Neutral with a price target of $22.00 (from $25.00).

The analyst comments: "NEP reported 3Q results below expectations primarily owing to lower wind resource. More importantly, the company announced that it intends to provide an update to investors by no later than the 4Q earnings call regarding the strategic review of its long-term CEPF obligations and cost of capital. NEP removed prior language regarding its DPU growth targets thru FY26 and the CEO noted a 'reflection' on the YieldCo model, which we believe could signal a one-time DPU cut to remove the CEPF overhang, followed by a possible transition towards a GrowthCo model with a higher percentage of cash flow being retained in order to grow the portfolio. If this is indeed the case, we would expect some continued volatility in the stock as the investor base churns away from dividend-oriented investors; however, this could potentially set a new base to grow off (largely organic growth at least initially) beginning in FY25."

For an analyst ratings summary and ratings history on NextEra Energy Partners click here. For more ratings news on NextEra Energy Partners click here.

Shares of NextEra Energy Partners closed at $21.01 yesterday.

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