Analyst: Solar Energy Provider in an Impossible Position

NEP is already down more than 50% over the last 12 months

Jake Scott

Deputy Editor

Jun 13, 2024 at 9:03 AM

NextEra Energy Partners LP (NYSE:NEP) stock is down 3.6% in premarket trading, after Barclay downgraded the solar energy provider to "underweight" from "equal weight" and lowered its price target to $25 from $32. The analyst in coverage noted NextEra's convertible equity portfolio financing caused overhangs it can't get out from under.

On track for a third-straight loss, NextEra Energy stock could dip below its year-to-date breakeven level and extend its year-over-year deficit of 50.2%. The shares are set to open at their lowest mark since early May and fall below recent support from its 50-day moving average.

Options traders are in luck, as the equity sports affordably priced premiums at the moment. The stock's Schaeffer's Volatility Index (SVI) of 36% sits in the 14th percentile of its annual range, indicating options players are pricing in low volatility expectations for NEP. Plus, its Schaeffer's Volatility Scorecard (SVS) stands at an 87 out of 100, indicating NextEra Energy stock's exceeded option traders' volatility expectations in the past 12 months.

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