Is NextEra Energy, Inc. overvalued or undervalued?

As of 8 September 2025, the valuation grade for NextEra Energy, Inc. has moved from expensive to very expensive, indicating a significant concern regarding its current valuation. The company appears to be overvalued, with a P/E ratio of 36, an EV to EBITDA of 34.45, and a Price to Book Value of 2.98, all of which are substantially higher than its peers. For instance, The Southern Co. has a P/E of 25.19, while Duke Energy Corp. shows a P/E of 18.96, highlighting the premium NextEra Energy commands.
In terms of performance, NextEra has underperformed relative to the S&P 500 across multiple time frames, with a 1-year return of -16.01% compared to the S&P 500's 17.14%. This trend continues over longer periods, with a 3-year return of -16.51% against the S&P 500's 70.41%. These figures reinforce the notion that NextEra Energy is not only overvalued but also lagging behind broader market performance.