SAP, dynaCERT, NextEra Energy – Major news paves the way

NextEra Energy – In the eye of the hurricane

Despite Hurricane Milton, one of the strongest tropical storms recorded, sweeping across Florida, NextEra Energy exceeded analysts' earnings expectations. Analysts had forecast an adjusted profit of USD 0.97 per share, while the Company reported USD 1.03 per share, exceeding consensus estimates. Due to the destruction, 3.5 million people were temporarily without electricity, including 670,000 customers of Florida Power & Light, a subsidiary of NextEra.

However, revenues, which depend heavily on weather conditions and impairment charges, were not convincing. Although up 5.6% from the year-ago quarter, revenues of USD 7.57 billion missed market expectations by USD 440 million.

NextEra Energy reported a total shareholder-adjusted net income (non-GAAP) of USD 2.13 billion, up from USD 1.92 billion year-on-year. On an unadjusted basis (GAAP), net income of USD 1.85 billion was achieved. Management confirmed a positive outlook with the goal of increasing adjusted earnings per share by 6-8% annually and the quarterly dividend by approximately 10%.

From a strategic perspective, the Company plans to significantly expand its generation and storage capacity to meet growing energy demand, particularly in Florida. By 2027, capacity is expected to increase by 36.5 to 46.5 gigawatts, half of which will come from solar and the other half from wind and energy storage.

dynaCERT – Revaluation possible

Not the quarterly figures, but rather a groundbreaking announcement, which the management has been waiting for for some time, could push the dynaCERT share into higher realms in the near future. The price accelerator lies in the issuance of emission certificates. At the beginning of the month, dynaCERT received official confirmation of the methodology from Verra, the most widely used program globally for offsetting greenhouse gas emissions.

dynaCERT can now generate significant additional revenues by managing carbon credits for its HydraGEN™ customers. The patented system enables the retrofitting of conventional diesel engines. It particularly targets users of heavy vehicles in the mining, oil and gas, transportation, and power generation sectors.

The dynaCERT business model provides for a revenue split with the customer based on the revenues generated by the sale of emission credits. The plan is for dynaCERT to retain around 50% of the revenues from emission credits, with the other half being passed on to the customer. After installing the bridge technology, customers can achieve significant fuel savings of up to 20% and obtain CO2 certificates, effectively providing them with a cashback option.

Following the announcement, dynaCERT's shares rose by around 40% to CAD 0.29, but they were sold off again in the following trading days. However, if the first major orders from fleet operators are reported after the forward-looking announcements, the last interim high will likely be a thing of the past.

SAP – Like clockwork

At almost 60%, the largest European software manufacturer, SAP, is one of the top performers in the German-leading index DAX. The third-quarter figures further boosted the share price, leading to a new all-time high of EUR 223.20. Numerous target price increases by various analyst firms followed although they are likely to adjust these again in due course.

Metzler Bank raised the target price from EUR 210 to EUR 237, leaving the rating at "Buy". The software group's business momentum in the cloud business remains strong. Analyst Oliver Frey, therefore, raised his revenue and earnings forecasts for the years 2024 to 2026. Baader Bank also raised its target from EUR 205 to EUR 230, leaving the rating at "Add".

The Walldorf-based company earned significantly more in the third quarter. Adjusted for special items, earnings before interest and taxes rose unexpectedly sharply by 27% year-on-year to EUR 2.24 billion. SAP is now planning currency-adjusted growth of 20 to 23% for the full year 2024. Previously, the range was between 17 and 21%.

The revenue forecast for the entire product range has also been raised. It now expects a currency-adjusted growth of 10 to 11%, compared to the previously forecast 8 to 10%. A key factor in this positive correction is the unexpectedly robust development in the license business. Although SAP CEO Klein is primarily focusing on cloud software, which promises long-term advantages through continuous subscription fees in terms of customer loyalty and increased revenue and profits, the license business is currently stronger than expected.

Despite Hurricane Milton sweeping across Florida, NextEra Energy reported better-than-expected earnings. SAP reached another all-time high with surprisingly strong quarterly results. dynaCERT achieved a milestone with its approval from Verra.