NextEra Partners raised at J.P. Morgan, seeing little downside left after big drop

NextEra Energy Partners (NYSE:NEP) -2.9% in Thursday’s trading, extending the 16% plunge from the previous session, after posting Q3 results that came in well below expectations.

Seeing little downside remaining after the stock’s sharp drop and believing continued ownership by NextEra Energy (NEE) is now a more likely outcome, J.P. Morgan upgrades NextEra Partners (NEP) to Neutral from Underweight with a $22 price target.

JPM’s Mark Strouse says near-term risk remains around NextEra Partners’ (NEP) longer-term CEPF obligations and its ability to accretively finance potential dropdown acquisitions, while seeing a chance that “NEP can stabilize its cost of capital, grow the portfolio, and perhaps re-establish a virtuous cycle after a likely one-time reset to CAFD and DPU in order to satisfy CEPF obligations.”

Strouse also believes a potential dropdown announcement, in conjunction with a DPU reset, could be a catalyst for the stock and provide increased growth visibility into FY 2026 and beyond.