NextEra Energy Partners LP (NEP)

NextEra Energy Partners LP (NEP) stock plummeted by 6.23% due to rising long-term interest rates, impacting capital-constrained companies like NEP.

• Reason for Decline: The decline was attributed to a hot Consumer Price Index (CPI) report for March, which showed a higher-than-expected increase in inflation. This report raised concerns about the difficulty of refinancing or raising new capital for companies like NEP.
• Company Debt Concerns: NEP has high levels of debt or the need to raise more capital in the near future. Rising long-term interest rates make it challenging for this company to refinance debt or raise new capital.
• Impact of Inflation and Rising Interest Rates: The CPI report for March showed a month-over-month increase of 0.4% and an annual increase of 3.5%, both ahead of analyst expectations. The 10-year Treasury bond yield rose to 4.568% at its midday highs, its highest point of the year. Rising interest rates make it more difficult for companies like NEP to raise capital, halting their growth potential.

NextEra Energy Partners (NEP) dropped by 3.73% from $23.61 to $22.73 in the trading on Monday November 13, 2023. The reason why NEP stock down today is due to concerns about increased interest rate. Investors are concerned that rising interest rates, fueled by inflation data expected this week, could jeopardize NextEra Energy Partners' dividend yield of 14.3%.

• With $2.2 billion in debt maturing before 2026, higher interest rates could significantly increase NextEra's borrowing costs, reducing cash available for dividend payments. As a result, the stock price is sensitive to interest rate fluctuations, making NEP stock down today.

Shares of NextEra Energy Partners (NEP) dropped by 11.35% from $27.16 to $23.99 in the trading on Thursday, Novemeber 9, 2023. The reason why NEP down is due to an analyst's downgrade. Angie Storozynski at Seaport Global Securities downgraded both NextEra Energy (NEE) and its yieldco NextEra Energy Partners (NEP) on the same day. As a result, both stocks entered bearish territory. NextEra Energy Partners bore the brunt, closing the day with a 12% decrease, while NextEra Energy's stock declined by 5%. The downgrade was prompted by concerns regarding the quality and sources of NextEra Energy's earnings, which Storozynski found less appealing in terms of valuation. She noted that the stock carried a 41% P/E premium compared to other electric utility stocks. Additionally, Storozynski cited the company's short-term debt burden as a contributing factor to the downgrade. Regarding NextEra Energy Partners, the analyst expressed doubts about the partnership's ability to sustain its recent growth in unitholder distributions. Given that distribution growth is a key attraction for yieldco investors, any slowdown could lead to a sell-off. Storozynski predicted a significant reduction in Partners' distributions by the end of 2024.

Shares of NextEra Energy Partners, LP Com (NEP) dropped by 4.85% from $29.07 to $27.66 in the trading on Friday, November 3, 2023. The reason why NEP down is due to concerns related to long-term interest rates and labor reports, impacting not only NEP but also other yield-oriented equities in the utilities and infrastructure sectors.

• Interest Rate Impact on Utilities and Infrastructure: Long-term interest rates, particularly the 10-year Treasury bond rate, dropped by over 11 basis points on that day, reaching 4.676%. This decline followed a recent increase in bond yields, prompting market participants to believe that rates had risen too high, leading to increased buying activity.
• Recession Resistance in Utilities and Infrastructure: While lower interest rates generally benefit bond-like instruments, infrastructure stocks like NEP can hold up well during economic downturns. They often operate on fixed and recurring long-term contracts, providing resilience in economic downturns. While interest rate risks have affected even recession-resistant stocks, potential rate stabilization or decreases could position these infrastructure leaders as defensive investments for those concerned about a recession.

Shares of NextEra Energy Partners, LP Com (NEP) dropped by 7.00% from $23.01 to $21.40 in the trading on Thursday, October 12, 2023. The reason why NEP stock down include:

• Interest Rate Sensitivity: NEP is classified as a renewable energy yieldco. Yieldcos are companies formed to own and operate income-generating assets, such as renewable energy projects. These companies distribute a significant portion of their income to shareholders in the form of dividends. To operate profitably, yieldcos like NEP rely on access to low-cost capital.
• Rising Bond Yields: On october 12, there was an increase in long-term U.S. Treasury Bond yields. This means that the yields or interest rates on government bonds were rising. When bond yields go up, it leads to an increase in the cost of capital across the financial markets.

NextEra Partners (NEP) dropped by 8.74% from $22.55 to $20.58 in the trading on Monday October 9, 2023. The reasons why stock NEP down today includes:

• Lower price target: JPMorgan Chase analyst Mark Strouse issued a note on NextEra Partners, lowering his price target on the stock from $40 to $24.
• Discounted cash flows: Some of NextEra's long-term assets are the value of its power purchase agreements (PPAs). And if rates rise further, those fixed-price agreements made in a lower-rate environment can continue to go down.

Shares of NextEra Energy Partners (NEP) dropped by 16.70% from $29.70 to $24.74 in the trading on Monday October 2, 2023. The reasons why stock NEP is down today includes:

• Analyst's Downgrade: Wells Fargo analyst Neil Kalton downgraded NextEra Energy Partners from overweight to equal weight, citing the company's decision to reduce its expected dividend growth rate from 12%-15% to 5%-8%, with a target of 6%. The price target was also lowered from $80 per share to $33 per share.
• Rates on U.S. Treasuries rose: On Monday, benchmark 10-year U.S. Treasury yields reached their highest level in 16 years. Elevated Treasury rates result in increased expenses for companies seeking to refinance their debt.

NextEra Energy Partners (NEP) stock declined 18.47% for the second straight day on Thursday after JPMorgan published a note downgrading its rating on the stock from overweight to neutral, and cutting its one-year price target on the stock from $69 per share to $40 per share.

https://www.fool.com/investing/2023/09/28/why-nextera-energy-partners-stock-plummeted-again/

Shares of NextEra Energy Partners (NEP) stock collapsed in Wednesday trading, down 20.1% after the company reduced growth expectations for dividends to a range of from 5% to 8%, with a target of about 6%, through "at least 2026".

https://www.fool.com/investing/2023/09/27/why-nextera-energy-partners-stock-crashed-17-today/