NextEra Energy Partners LP (NYSE:NEP) shares tanked in early trading on Monday.

The company has a "challenging road ahead," with "insufficient growth from wind repowering and the looming ~$3.7B CEPF liabilities post-2026," according to RBC Capital Markets.

The NextEra Energy Partners Analyst: Shelby Tucker downgraded the rating for NextEra Energy Partners from Outperform to Sector Perform, while reducing the price target from $38 to $30.

The NextEra Energy Partners Thesis: The suite of solutions offered by the company is insufficient for it to maintain a healthy CAFD run-rate that would satisfy dividend payouts, given its CEPF liability post-2026, Tucker said in the downgrade note.

Check out other analyst stock ratings.

NextEra Energy's plans to repower 1.3GW is estimated to yield $70 million of CAFD, which could "partially offset the financing headwinds from upcoming maturities," the analyst wrote.

A dividend cut of around 50% "would reset the payout ratio to below 60%, which helps offset the CEPF liabilities and provides a payout ratio cushion through the late years of the CEPF buyout periods," he added.

NEP Price Action: Shares of NextEra Energy Partners had declined by 5.35% to $26.16 at the time of publication on Monday.

Photo: Courtesy of NextEra Energy, Inc.