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The strongest opportunity is that FY2027 diluted EPS holds within its forecast range while annual free cash flow remains positive after capital spending.
Pre-tax cost of debt above 9.35% within 24 months.
Hold. At the report-date price of $83.43 on 2026-09-04, the shares sit below Fair value of $87.41, but the gap is modest.3
The main risk is refinancing. If pre-tax debt cost rises above 9.35% within 24 months, financing expense could absorb growth and weaken free cash flow.
Potential value is $121.21, but it requires stronger free cash flow after capital spending and durable earnings growth.
The clearest upside is that FY2027 diluted EPS stays within its $4.23-$4.68 forecast range while annual free cash flow remains positive after capital spending.134
Demand is constructive through FY2027 if annual revenue forecasts are met. Industry evidence also shows high reinvestment, with capex at 33.6% of revenue and 3.15 times depreciation.
Hold because the supported two-year revenue runway is largely balanced by leverage and investment-conversion risk.
Demand is constructive through FY2027 if annual revenue forecasts are met. Industry evidence also shows high reinvestment, with capex at 33.6% of revenue and 3.15 times depreciation.
Hold because substantial debt and heavy investment limit the value of the supported outlook until revenue produces earnings per share and free cash flow after capital spending.
The most damaging path combines higher refinancing costs, weaker margins and negative annual free cash flow. Debt then absorbs more operating growth while investment needs force additional borrowing or dilution.
FY2025 operating cash flow and free cash flow show operating performance, but they do not establish customer protection, switching barriers, franchise rights or a cost advantage. Structural durability therefore remains unresolved.
Positive FY2025 operating cash flow and free cash flow do not by themselves prove lasting excess returns. Without evidence of structural protection, the duration of value creation remains unresolved.45
The highlighted cell is Fair value when every assumption sits at its base level ($87.41). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $6.0B after modeled reinvestment of $2.4B, with terminal value at 57.3% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
Revenue growth must produce diluted EPS and after capital spending. Extra share issuance would spread earnings across more shares and dilute existing holders.
FY2025 capex was $9.27 billion, while the industry benchmark was 33.6% of revenue and 3.15 times depreciation.3
Demand is constructive through FY2027 if annual revenue forecasts are met. Industry evidence also shows high reinvestment, with capex at 33.6% of revenue and 3.15 times depreciation.
The cycle turns harmful if refinancing costs rise while heavy capital spending continues before new assets generate enough cash. This is a conditional risk grounded in FY2025 debt, cash and capex, not an observed outcome.
Maintain existing exposure; no portfolio percentage is established. At the September 4, 2026 report-date price, the shares are below the $87.41 Fair value, but the gap is modest. Do not increase exposure until revenue growth translates into higher diluted earnings per share and free cash flow stays positive after capital spending. FY2025 debt was $95.62 billion versus $2.81 billion of cash, and capital spending was $9.27 billion.1345
Keep exposure unchanged. Reduce if pre-tax debt cost rises above 9.35% within 24 months, annual free cash flow falls below zero, FY2027 diluted EPS falls below $4.23, or GAAP falls below 27.14%. These breaches would show higher financing burdens or weaker conversion of into earnings and cash after capital spending.
The report-date price is below Fair value, but the gap is modest and leverage remains material.3
Do not initiate solely on forecast revenue growth; wait for stronger evidence that investment converts into free cash flow.4
High debt, heavy capital spending and refinancing exposure may not fit a defensive mandate.3
Hold existing exposure; do not add solely because FY2026-FY2027 revenue forecasts remain constructive.1
Annual revenue forecasts remain constructive through FY2027. FY2025 operating and free cash flow were positive, but debt and capital spending remained substantial. Evidence does not establish long-lasting structural protection.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
Higher refinancing costs and weaker margins increase external funding needs. This path is confirmed by breaches in debt cost, annual free cash flow or operating margin within 24 months.
If the pre-tax cost of debt moves above 9.35% within 24 months, higher financing expense could absorb operating growth while the investment programme remains capital intensive.23
A fall below zero within 24 months would show that investment spending no longer funds itself, increasing reliance on debt or new shares.34
A GAAP operating margin below 27.14% within 24 months would show that forecast revenue is arriving with weaker profit, reducing cash available for reinvestment and shareholders.35
The five developments that would weaken our investment case.
Higher refinancing expense would consume more operating profit and reduce funding flexibility during the capital programme.
Current:8.35% as of 2026-09-08
Alert ifAbove 9.35% within 24 months
Weaker cash after capital spending would increase reliance on debt or new shares. Issuing new shares would dilute existing holders and reduce their share of future earnings.
Current:$3.21 billion in FY2025
Alert ifBelow $0 within 24 months
Lower profit on each dollar of revenue would reduce earnings and cash available to fund the build.
Current:30.14% in FY2025
Alert ifBelow 27.14% within 24 months
Revenue growth must produce diluted EPS, not just higher sales. Weaker diluted EPS would leave less profit for each share and shorten the supported earnings-growth period.
Current:Mean forecast of $4.39 as of 2026-09-08
Alert ifBelow $4.23 by FY2027
Slower growth would remove support for extending the revenue path beyond FY2027 and would require lower earnings assumptions.
Current:Forecast of 11.78% as of 2026-09-08
Alert ifBelow 8% in FY2027
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Limitation: Terminal value is 63.2% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Limitation: Terminal value is 77.7% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
Revenue growth must translate into higher diluted earnings per share while annual free cash flow after capital spending stays positive. The path fails if FY2027 diluted EPS falls below its forecast range or annual free cash flow turns negative.
Upside persists if FY2027 diluted EPS remains within its forecast range and annual free cash flow improves after capital spending. It fades if EPS falls below that range or free cash flow turns negative.
Matching forecasts preserves the thesis but does not resolve financing risk.
That would increase reliance on external financing while debt remains substantial.
FY2025 operating cash exceeded reported profit, but substantial debt keeps financing risk separate.35
Negative cash after investment would increase financing needs.4
Higher borrowing costs would absorb profit and reduce funding flexibility.2
A shortfall would weaken the supported growth runway.1
| $17.07B |
| $20.96B |
| $28.11B |
| $24.75B |
| $27.48B |
| +12.6% |
| Gross profit | $8.59B | $10.14B | $17.98B | $14.87B | $17.26B | +19.1% |
| Operating income | $2.91B | $4.08B | $10.24B | $7.48B | $8.28B | +29.8% |
| Net income | $3.57B | $4.15B | $7.31B | $6.95B | $6.84B | +17.6% |
| EPS (diluted) | $1.81 | $2.10 | $3.60 | $3.37 | $3.30 | +16.2% |
| EBITDA | $8.10B | $8.95B | $16.76B | $14.03B | $16.17B | +18.9% |
| R&D | — | — | — | — | — | — |
| SG&A | $5.68B | $5.98B | — | — | — | +5.4% |
FY2025 operating cash flow remained positive after heavy capital spending, but free cash flow was much smaller. A fall below zero would signal greater external funding needs.45
Capital allocation is expansion-led. Capex stayed elevated across FY2023-FY2025, while debt reached $95.62 billion in FY2025. Better free cash flow must accompany any slower investment phase.
The admissible evidence does not establish a dated return-on-invested-capital trajectory. Heavy investment means future returns depend on new assets producing cash without proportional financing needs.
A supported company return comparison is not available; the dated WACC was 7.4345% on 2026-09-08.
Operating cash flow was $12.49 billion versus net income of $6.84 billion.
The earnings base is credible, but this does not remove leverage risk.
FY2025 capex was $9.27 billion and free cash flow was $3.21 billion.
Value depends on the build producing future cash rather than merely expanding assets.
| Revenue | $27,476,000,000 |
|---|---|
| Cost of revenue | $10,221,000,000 |
| Gross profit | $17,255,000,000 |
| Operating expenses | $8,975,000,000 |
| Operating income | $8,280,000,000 |
| Non-operating items and tax | -$1,445,000,000 |
| Net income | $6,835,000,000 |
| Total assets | $212,721,000,000 |
|---|---|
| Cash | $2,812,000,000 |
| Current assets | $13,584,000,000 |
| Total liabilities | $146,242,000,000 |
| Current liabilities | $22,817,000,000 |
| Shareholders’ equity | $66,479,000,000 |
| Net income | $6,835,000,000 |
|---|---|
| Operating inflow | $13,415,000,000 |
| Depreciation and amortization | $6,580,000,000 |
| Operating cash flow | $12,485,000,000 |
| Operating outflow | $930,000,000 |
| Cash available | $26,871,000,000 |
| Beginning cash | $1,402,000,000 |
| Financing inflow | $12,979,000,000 |
| Exchange-rate effect | $5,000,000 |
| Investing outflow | $23,865,000,000 |
| Capex | $9,274,000,000 |
| Other investing activities | $14,591,000,000 |
| Ending cash | $3,006,000,000 |
| Investing cash flow | -$23,865,000,000 |
| Financing cash flow | $12,979,000,000 |
Point-in-time financial data used in the 2026-09-08 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $16.1B | $8.9B | $2.9B | $6.4B | $2.1B | $4.2B | $3.1B | $77M | — | $1.6B | — | -$8B | $2.4B | — | $1.5B | $1.3B | $30.8B | 27.6% | — | 2.9% | — |
| 2017-12-31 | $17.2B | $8.9B | $5.4B | $6.5B | $1B | $5.4B | $2.4B | $76M | — | $1.8B | — | -$8.9B | $2.9B | $1.5B | $2B | $1.7B | $35.1B | 30.1% | — | 3.8% | — |
| 2018-12-31 | $16.7B | $13B | $6.6B | $6.6B | $583M | $6B | $3.9B | $82M | — | $2.1B | — | -$11B | $7.6B | $2B | $5.3B | $638M | $37.7B | 25.6% | — | 3.6% | — |
| 2019-12-31 | $19.2B | $10.6B | $3.8B | $8.2B | -$2.9B | $11.1B | $4.2B | -$108M | — | $2.4B | — | -$16.2B | $3.9B | $5.3B | $1.1B | $600M | $42.6B | 27.9% | — | 3.4% | — |
| 2020-12-31 | $18B | $8.7B | $2.9B | $8B | $224M | $7.8B | $4.1B | $2B | — | $2.7B | — | -$13.7B | $6.2B | $1.1B | $1.5B | $6.8B | $48.1B | 28.4% | — | 2.7% | — |
| 2021-12-31 | $17.1B | $8.1B | $3.6B | $7.6B | -$277M | $7.8B | $3.9B | $1.6B | — | $3B | — | -$13.6B | $5.8B | $1.5B | $1.3B | $639M | $54.8B | 17.1% | — | 3.6% | — |
| 2022-12-31 | $21B | $9B | $4.1B | $8.3B | -$1.5B | $9.7B | $4.5B | $142M | — | $3.4B | $10.3B | -$18.4B | $12.2B | $1.3B | $3.4B | $1.6B | $65B | 19.5% | — | 5.5% | — |
| 2023-12-31 | $28.1B | $16.8B | $7.3B | $11.3B | $1.8B | $9.5B | $5.9B | $139M | — | $3.8B | $8.2B | -$23.5B | $12.1B | $3.4B | $3.4B | $2.7B | $73.2B | 36.4% | — | 5.5% | — |
| 2024-12-31 | $24.8B | $14B | $6.9B | $13.3B | $4.7B | $8.5B | $5.5B | — | — | $4.2B | $11.6B | -$22.3B | $7B | $3.4B | $1.4B | $1.5B | $82.3B | 30.2% | — | 6.3% | — |
| 2025-12-31 | $27.5B | $16.2B | $6.8B | $12.5B | $3.2B | $9.3B | $6.6B | — | — | $4.7B | $13.7B | -$23.9B | $13B | $1.4B | $3B | $2.8B | $95.6B | 30.1% | — | 6.7% | — |
NextEra Energy Inc. (NEE) trades at 19.3x forward earnings against a peer median of 17.6x. Its EV/EBITDA of 20.0x compares with a peer median of 13.3x. The comparison uses 4 peers: Constellation Energy Corporation, Dominion Energy Inc., The Southern Company and Duke Energy Corporation, as of 2026-09-08.
| Trend | Impact | Note |
|---|---|---|
| Utility investment intensity | neutral | High industry spending supports asset growth but also increases capital and refinancing risk. |
NEE enters this phase with positive FY2025 free cash flow, but substantial debt makes execution and financing costs decisive.34
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
| 13.4% |
| 11.8% |
| 7.0% |
| 5.0% |
| 3.0% |
| 3.0% |
| 3.0% |
| 3.0% |
| 3.0% |
| 3.0% |
| Operating margin | 30.1% | 30.1% | 30.1% | 30.1% | 30.1% | 30.1% | 30.1% | 30.1% | 30.1% | 30.1% |
| Operating income | $9.39B | $10.49B | $11.23B | $11.79B | $12.14B | $12.51B | $12.88B | $13.27B | $13.67B | $14.08B |
| Tax rate | 10.1% | 10.1% | 10.1% | 10.1% | 10.1% | 10.1% | 10.1% | 10.1% | 10.1% | 10.1% |
| NOPAT | $8.44B | $9.43B | $10.10B | $10.60B | $10.92B | $11.25B | $11.58B | $11.93B | $12.29B | $12.66B |
| Reinvestment | $2.44B | $2.05B | $1.46B | $767.21M | $0.00 | $1.01B | $2.08B | $3.22B | $4.42B | $5.68B |
| Reinvestment rate (of NOPAT) | 29.0% | 21.7% | 14.5% | 7.2% | 0.0% | 9.0% | 18.0% | 27.0% | 35.9% | 44.9% |
| Depreciation and amortization | $7.46B | $8.34B | $8.92B | $9.37B | $9.65B | $9.94B | $10.24B | $10.54B | $10.86B | $11.19B |
| Free cash flow to firm | $6.00B | $7.39B | $8.63B | $9.83B | $10.92B | $10.24B | $9.50B | $8.72B | $7.87B | $6.97B |
| Terminal growth | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
| Diluted shares | 2.09B | 2.11B | 2.13B | 2.15B | 2.17B | 2.19B | 2.22B | 2.24B | 2.26B | 2.28B |
| EPS | $3.84 | $4.39 | $4.55 | $4.63 | $4.61 | $4.70 | $4.80 | $4.90 | $4.99 | $5.09 |
| Net margin | 25.7% | 26.6% | 26.0% | 25.5% | 24.9% | 24.9% | 24.9% | 24.9% | 24.9% | 24.9% |
| Implied net income | $8.02B | $9.27B | $9.70B | $9.96B | $10.02B | $10.33B | $10.64B | $10.95B | $11.28B | $11.62B |
| D |
| Dominion Energy Inc. |
| 17.3x |
| 3.2x |
| 14.1x |
| 8.3% |
| 29.2% |
| SO | The Southern Company | 17.9x | 3.4x | 12.5x | 11.5% | 29.6% |
| DUK | Duke Energy Corporation | 16.8x | 2.9x | 11.3x | 9.9% | 27.5% |
