QuestionQuestion

Write about stock analysis for the company Next Era Energy (NEE). Make sure you cover the following bullets:

• If you identify your company as a not buy, please indicate what the price would have to be for it to become a buy and/or what SPECIFICALLY would have to change to make it a buy candidate.
• Evaluate all sources of return – including dividends if applicable.

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My biggest concern and the reason why I have marked my company as not to buy is PE ratio. Currently, according to reuters.com, company’s PE ratio is 23.62 which is, at this moment, higher than both industry and sector (their respective PE ratio is 20.69 and 14.12). This tells me that the stock price is expensive if we compare it with potential earnings that the same stock brings. In order to buy this stock I would like to have PE ratio which somewhere between PE ratios of industry and sector. This can be obtained if the price is decreased for more than 14%. In ideal case, I would require PE ratio which is smaller than sector PE but that would require decrease of more than 40% which is not realistic....
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