The brokerage firms believe that FPL is positioned to benefit from the increased national emphasis on low-carbon and renewable generation and should be able to add at least 1,000 MW of renewable generation per year and see earnings upside despite depressed market power prices. However, they believe that these upsides are already discounted in the stock price. The firms believe that the Company is well-positioned to continue the growth of renewable generation. However, they are concerned due to long-term growth pressures such as the roll-off of tax credits and above-market hedges as well as the lack of clarity on future cost recovery at the utility. The firms still see some risks to growth at NextEra from a slowdown in the renewable pipeline post 2010; however, they also see upside risk given a more explicit federal renewable mandate. Despite very positive longer-term prospects, the firms expect economic uncertainties to continue to slow energy infrastructure investment and minimal rate relief to pressure FPL as well as sector stock prices in the near term. Though the firms remain optimistic about the valuation of the shares they remain concerned about regulatory uncertainty and a weak wholesale market.
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