NextEra Energy Partners, a company specializing in the acquisition and management of clean-energy projects, experienced a significant drop in its shares by 16%, bringing the price down to $39.61. This decline came after the company announced a revision to its long-term growth outlook, reducing it by half. The reasons cited for this adjustment were the impact of higher interest rates and tighter monetary policy.
With a year-to-date decrease of 44%, NextEra Energy Partners is currently on track for its largest percentage decrease in over three-and-a-half years. These challenges have led the company to reconsider its growth projections. Previously, they had aimed for a limited partner distribution per unit growth rate of 12% to 15% through at least 2026. However, the revised target now stands at a more conservative range of 5% to 8% with an actual growth rate of 6%.
Chief Executive, John Ketchum, acknowledged the effect that tighter monetary policy and higher interest rates can have on financing and stated that: “Reducing growth expectations will allow NextEra Energy Partners to focus on higher-yielding growth opportunities.”
This adjustment in outlook reflects the changing landscape that NextEra Energy Partners must navigate in order to continue its success in the clean-energy sector.