It’s an unexpected maneuver out of energy stock Nextera Energy Partners (NYSE:NEP), but one that might work out rather nicely. A new report notes that Nextera bought in on a natural gas pipeline, and a particular one with a special feature to it. Investors, however, are not happy, and Nextera shares are down over 3.5% in Thursday afternoon’s trading.
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Nextera Energy Partners picked up 25% of class B membership in South Texas Midstream. South Texas Midstream is a natural gas pipeline operation that the broader partnership is looking to sell off, and Nextera dropped $201 million to pick up the membership. Based on an 8-K filing with the Securities and Exchange Commission, that $201 million came from a combination of stored cash and $140 million from a currently-operating credit facility.
That actually goes against earlier word from Nextera, who noted back in May that it planned to sell out its natural gas pipeline connections, and instead stick to renewable resources. That appears to be largely out the window now, and between this and the recently-cut growth forecasts, Nextera has lost about half its overall value just in the last week. Wells Fargo analysts recently cut their rating on Nextera stock, dropping the rating from Overweight to Equal Weight and declaring a “crisis of confidence that will be difficult to restore” already in progress.
Is NEP Stock a Good Buy?
Analysts are largely split, however, on Nextera’s ultimate fate. Nextera Energy Partners stock is currently considered a Moderate Buy by analyst consensus, with seven Buy ratings and six Holds. Further, with an average price target of $43.83, Nextera Energy Partners stock offers investors a massive 103.01% upside potential.