Shares of NextEra Energy (NEE 1.13%) stumbled out of the gates in 2022, plunging 16.3% in January, according to data provided by S&P Global Market Intelligence. That sell-off wiped away nearly $30 billion of the utility's market value. While the stock market correction last month played a role, the primary factor weighing on the clean energy-focused company was its decision to hand over the reins to a new generation of leadership.
NextEra Energy named John Ketchum its president and CEO, succeeding longtime CEO Jim Robo. Robo will become executive chairman for a transition period before retiring. Ketchum is a 19-year NextEra veteran, currently serving as the CEO of its energy resources segment. He also served as the company's CFO and the CFO of its utility, Florida Power and Light (FPL), and its publicly traded partnership, NextEra Energy Partners (NEP 7.94%).
That was one of a series of leadership changes that also saw the company name a new CFO, CEO of energy resources, and CEO of FPL. The company promoted all those new leaders internally.
Robo played a significant role in leading the transformation of NextEra. During his decadelong tenure as CEO, he grew NextEra into a global leader in clean energy and one of the largest electric utilities in the country by market cap, creating significant shareholder value in the process.
While Robo's decision to retire surprised the market, he's leaving the company in good hands. Ketchum has worked alongside Robo for nearly two decades, playing an instrumental role in growing the company.
Robo also set the company up for success. NextEra reported strong financial results last month. It grew its adjusted earnings per share by 10.4% in 2021. The company also increased its financial expectations for 2022 and 2023 while extending its long-term growth outlook by two years to 2025. It expects to deliver double-digit earnings growth in 2022 while growing its profits at a 6% to 8% annual pace from that higher base through 2025. It believes it can deliver growth at or near the top end of that range. A major growth driver is the company's success in securing new renewable energy development projects and its strong financial position.
Investors don't like change, especially one as big as losing a CEO with a long history of creating shareholder value. However, NextEra Energy will remain in good hands and in an excellent position to create value for investors. Because of that, last month's sell-off looks like a potential buying opportunity for long-term investors.