NextEra Energy (NEE): A Top Momentum Pick Among Energy Stocks

When investors hunt for growth opportunities, energy stocks have become an increasingly attractive segment in the market. Among these, NextEra Energy (NEE) stands out as a compelling choice for those seeking momentum-driven returns. The company, which operates as the parent entity of Florida Power & Light Co., has demonstrated strong upward price trajectories paired with improving analyst sentiment—two hallmarks of effective momentum investing.

Why Energy Stocks Matter for Momentum Investors

Momentum investing centers on a straightforward principle: capitalize on a stock’s current price direction with the belief that established trends tend to persist. Rather than timing individual turns, momentum followers ride waves of buyer interest and price momentum, seeking to exit positions when the trend potentially reverses. For energy stocks specifically, this approach has gained relevance as the sector navigates shifts between traditional power generation and renewable energy investment.

The Zacks investment research platform offers systematic tools to identify momentum candidates, including its proprietary Momentum Style Score. This metric examines price movement trajectories, earnings estimate shifts, and trading volume patterns. NextEra Energy currently earns a Momentum Style Score of B, paired with a Zacks Rank of #2 (Buy)—a combination historically associated with outperformance over one-month periods.

NEE’s Price Performance Leads Its Peers

To assess whether NEE qualifies as a solid energy stocks investment with momentum characteristics, it’s instructive to examine its recent trading activity relative to the broader market and its industry peers.

On a weekly basis, NEE shares have appreciated 1.41%, outpacing the Zacks Utility - Electric Power industry’s 0.83% decline during the same timeframe. The momentum becomes more pronounced over longer intervals. Monthly returns reveal NEE gaining 8.22% compared to its industry’s 4.22%, while quarterly performance shows a 6.68% advance for NextEra Energy versus broader utility indices.

When placed against the S&P 500 benchmark, NextEra Energy’s performance becomes even more compelling. Over the past quarter, the index moved just 1.81%, while NEE surged 6.68%—more than three times the market’s return. Annually, the gap widens further: the S&P 500 advanced 17.32% while NEE climbed 23.55%, demonstrating sustained outperformance that distinguishes this energy stock from general market movements.

Trading volume reinforces this bullish backdrop. NEE’s 20-day average trading volume stands at approximately 8.6 million shares daily. Rising stock prices accompanied by above-average volume typically signal genuine institutional and retail interest, rather than speculative spikes—a positive indicator for energy stocks seeking to maintain momentum.

Earnings Revisions Signal Continued Growth

Beyond price action, the Zacks Momentum Style Score incorporates earnings estimate revisions—a powerful signal of shifting market expectations. For NextEra Energy, the recent revision activity has been decidedly positive. Over the past two months, three earnings estimates for the full year have moved upward with zero downward revisions, lifting the consensus estimate from $3.97 to $3.99 per share.

Looking ahead to the next fiscal year, the trajectory remains favorable. Three additional upward estimate revisions have occurred with no negative adjustments, suggesting analysts anticipate continued strength in NEE’s operational performance and profitability. This consistent pattern of upward revisions typically precedes sustained stock gains and reinforces the momentum narrative.

The Verdict for Energy Stocks

Taken collectively, NextEra Energy’s combination of outpacing price appreciation, positive earnings momentum, above-average trading volume, and strong analyst support presents a compelling case for investors exploring energy stocks with momentum characteristics. With its #2 Buy rating and B Momentum Style Score, NEE merits serious consideration for portfolios seeking near-term growth opportunities within the energy sector.

For investors monitoring energy stocks and researching fresh picks positioned for near-term ascendance, NextEra Energy deserves a prominent spot on your watchlist.