How to make a complete Buy-Side Equity Research Memo with Complete AI help.

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Instruction :


Prompt :

SYSTEM / STYLE PROMPT

You are a senior buy-side equity research analyst writing a professional investment memo.

Write in a clean, structured, institutional style suitable for hedge funds, asset managers, or family offices.

Formatting rules:

- Use clear section headers (ALL CAPS)

- Use subheaders

- Use bullet points and tables where helpful

- Be concise, analytical, and precise

- Avoid marketing language

- Use assumptions explicitly where data is estimated

- Use USD unless stated otherwise

- End each section with a brief analytical takeaway


PROMPT 1: BUSINESS OVERVIEW & COMPETITIVE POSITION

Analyze NextEra Energy as a buy-side equity analyst.

Create a professional document section titled:

"BUSINESS OVERVIEW & COMPETITIVE POSITION"

Include the following subsections:

1. Core Business Model (plain English explanation)

2. Key Products and Services

3. Customer Segments

4. Key Geographies

5. Competitive Landscape

   - Primary competitors

   - How the company differentiates itself (cost, scale, brand, technology, switching costs, regulation, etc.)

Formatting requirements:

- Use concise bullet points

- Use subheadings for clarity

- Keep tone factual and analytical


End the section with:

"Analyst Takeaway:" (2–3 sentences summarizing strategic positioning)


PROMPT 2: FINANCIAL QUALITY (5–10 YEAR TRACK RECORD)

Create a section titled:

"FINANCIAL QUALITY & HISTORICAL PERFORMANCE (5–10 YEARS)"

Analyze NextEra Energy with focus on long-term financial quality.

Cover the following metrics:

- Revenue CAGR

- Operating margin trend

- Free cash flow per share trend

- ROIC and ROE vs estimated cost of capital

- Balance sheet strength (net debt/cash, leverage ratios, interest coverage)

Include:

- Bullet points for trends

- A small summary table if helpful

Then create a scoring table (1–10 scale):


| Metric         | Score (1–10) | Justification |

|---------------|-------------|---------------|

| Growth        |             |               |

| Profitability |             |               |

| Balance Sheet |             |               |

| Consistency   |             |               |


End with:

"Analyst Takeaway:" (quality of earnings and durability)


PROMPT 3: GROWTH STAGE & CAPITAL ALLOCATION

Create a section titled:

"GROWTH STAGE & CAPITAL ALLOCATION"

Determine which growth stage NextEra Energy is in:

- Early Growth

- Scaling

- Mature Compounder

- Ex-Growth / Cash Cow

Justify the classification using:

- 3–5 year revenue growth

- EPS growth trends

- Free cash flow generation

- Net cash or net debt position

- Capital allocation mix:

  - Reinvestment (R&D, capex)

  - Acquisitions

  - Dividends

  - Share buybacks


Explain whether management’s capital allocation strategy aligns with the company’s growth stage.

End with:

"Analyst Takeaway:" (capital discipline and reinvestment quality)


PROMPT 4: VALUATION ANALYSIS & SCENARIO FRAMEWORK

Create a section titled:

"VALUATION ANALYSIS"

Evaluate the current valuation of NextEra Energy.

1. Current Trading Multiples:

   - P/E

   - EV/EBITDA

   - P/S

   - P/B

2. Compare these multiples to:

   - The company’s own 5–10 year historical averages

   - 3–5 close publicly traded peers

Present comparisons in a clean table.

3. Multiple Interpretation:

   - Does the valuation imply optimism, pessimism, or historical normalization?

4. 3-Year Scenario Analysis:

Create a table with Bear / Base / Bull cases including:

- Revenue growth assumptions

- Operating margin assumptions

- Valuation multiple applied

- Implied fair value per share

End with:

"Risk/Reward Assessment:" (Attractive / Neutral / Unattractive for long-term investors)


PROMPT 5: GROWTH DRIVERS, RISKS & MONITORING METRICS

Create a section titled:

"KEY GROWTH DRIVERS & RISKS (3–5 YEAR VIEW)"

Part A: Growth Drivers

List the top 3–5 growth drivers.

For each driver, include:

- Description

- Impact: Low / Medium / High

- Probability: Low / Medium / High

- Key leading indicators to track (KPIs, industry data, company disclosures)

Part B: Key Risks

List the top 3–5 risks.

For each risk, include:

- Description

- Impact: Low / Medium / High

- Probability: Low / Medium / High

- Early warning signs investors should monitor


End with two short subsections:

- "What Needs to Go Right for Multi-Year Outperformance"

- "What Would Break the Thesis / Trigger a Sell Decision"


OPTIONAL FINAL PROMPT: INVESTMENT CONCLUSION

Create a final section titled:

"INVESTMENT CONCLUSION"

Summarize:

- Business quality

- Financial strength

- Growth durability

- Valuation attractiveness

- Key upside vs downside factors


Conclude with a clear stance:

- Bullish / Neutral / Cautious

- Suitable investor profile (long-term compounder, cyclical play, value re-rating, etc.)


Pasting this in Claude and then :

Can you make a 2000 words Investment Memo as instructed and make a PDF with heading as blue background and white text, All Font : Poppins



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