{"id":68294,"date":"2023-10-03T14:39:55","date_gmt":"2023-10-03T18:39:55","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/heres-why-largest-u-s-utility-stock-just-tanked-to-a-3-5-year-low-as-sector-flails\/"},"modified":"2023-10-03T14:39:58","modified_gmt":"2023-10-03T18:39:58","slug":"heres-why-largest-u-s-utility-stock-just-tanked-to-a-3-5-year-low-as-sector-flails","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=68294","title":{"rendered":"Here\u2019s Why Largest U.S. Utility Stock Just Tanked To A 3.5-Year Low As Sector Flails"},"content":{"rendered":"<div>\n<h2 class=\"topline-heading\">Topline<\/h2>\n<p>Utility stocks keep spiraling, headlined by a more than 20% one-week share price drop from the most valuable firm by market capitalization, and the sector largely has one factor to thank: Rising interest rates.<\/p>\n<h2>Key Facts<\/h2>\n<div class=\"key-facts\">\n<div class=\"key-facts-element\">\n<p>The S&amp;P 500\u2019s utility sector tanked 5% on Monday, closing at its lowest level since June 2020, dipping another 1% in early Tuesday trading.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>Captaining the losses was Florida-based renewable energy firm NextEra Energy, the largest utility company by market value at over $100 billion, which has crashed nearly 25% over the last week to near $50, its lowest ticker since March 2020.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>NextEra\u2019s crash came as numerous analysts slashed their outlook for the stock, including Wells Fargo\u2019s Neil Kalton, who cut his price target 20% to a still-bullish $84, largely attributing the recent decline to a \u201cchallenging\u201d macroeconomic situation.<\/p>\n<p>  <fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad>\n <\/div>\n<div class=\"key-facts-element\">\n<p>Much of the recent macro headaches can be traced to rising rates, as utilities are among the most sensitive stocks to rate changes historically considering the sectors\u2019 heavy reliance on debt financing to grow business.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>It\u2019s not just struggling bottom lines that scare investors away from the sector: Utility stocks typically offer high dividend payments, but as bond yields soar, individuals have another attractive option for income-generating investments.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>And for NextEra, dividend-hungry investors have further fuel for concerns as its subsidiary NextEra Energy Partners slashed its dividend growth forecasts in half last week; Goldman Sachs analyst Carly Davenport explained Sunday the slide comes amid escalating worries that the far-larger NextEra Energy will \u201cneed to revise its own earnings growth guidance as a result\u201d of its offshoot\u2019s downward revision.<\/p>\n<\/p><\/div>\n<\/div>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Big Number<\/h2>\n<p>20%. That\u2019s how much the utility sector is down year-to-date, more than twice as steep of a drop as any of the S&amp;P\u2019s 10 other sectors and far underperforming the broader index\u2019s 12% gain.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Surprising Fact<\/h2>\n<p>Yields for 10-year U.S. treasury notes climbed Tuesday to over 4.7%, their highest level since 2007 after tripling since the beginning of 2022, when the Federal Reserve began the ongoing rate-hiking cycle.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Contra<\/h2>\n<p>Analysts\u2019 average price target for Next Era is $79.31, implying 35% upside, according to FactSet. Kalton said he remains \u201chighly bullish [for] the long-term growth prospects for renewables\u201d and Next Era\u2019s \u201ccompetitive\u201d advantage domestically, adding, \u201cAs painful as the current period is, we believe [Next Era] will emerge in an even stronger position once the tide turns.\u201d<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\"><\/h2>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/dereksaul\/2023\/10\/03\/heres-why-largest-us-utility-stock-just-tanked-to-a-35-year-low-as-sector-flails\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Topline Utility stocks keep spiraling, headlined by a more than 20% one-week share price drop from the most valuable firm by market capitalization, and the sector largely has one factor to thank: Rising interest rates. Key Facts The S&amp;P 500\u2019s utility sector tanked 5% on Monday, closing at its lowest level since June 2020, dipping [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":68295,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-68294","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here\u2019s Why Largest U.S. Utility Stock Just Tanked To A 3.5-Year Low As Sector Flails | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Topline Utility stocks keep spiraling, headlined by a more than 20% one-week share price drop from the most valuable firm by market capitalization, and\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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