Entergy
ETR
$103.25
+2.41%
Entergy Corporation is a holding company operating five regulated, vertically integrated electric utilities that generate, transmit, and distribute electricity to more than 3 million customers across Arkansas, Louisiana, Mississippi, and Texas, with roughly 25 gigawatts of rate-regulated owned and leased generation capacity. As one of the largest power producers in the United States and a former top-tier nuclear owner, Entergy occupies a distinct position as a pure-play regulated utility with meaningful industrial and data-center load exposure in the fast-growing Gulf South region. The current investor narrative centers on the landmark Meta partnership and associated $2 billion customer savings and grid-expansion plan announced in March 2026, which positions Entergy as a direct beneficiary of AI-driven data-center electricity demand growth. At the same time, the stock has come under pressure in recent months as investors weigh the heavy capital expenditure requirements of that buildout against a premium valuation and a stretched balance sheet, creating an active debate over whether the growth investments will translate into durable rate-base and earnings expansion.…
ETR
Entergy
$103.25
Related headlines
Investment Opinion: Should I buy ETR Today?
The synthesized recommendation is a Hold with a bullish bias, reflecting a balanced view of Entergy's attractive long-term growth prospects and its near-term technical and financial headwinds. The analyst consensus rating of "buy" (mean 1.74) and average target price of $122.28 imply 21.2% upside, anchoring the constructive thesis. However, the stock's -12.34% three-month decline and -29.53% relative underperformance versus SPY over six months suggest that the market is not yet rewarding the growth narrative, and the premium valuation leaves little room for error.
The supporting evidence for a Hold is mixed but leans positive on fundamentals. Revenue grew 5.85% YoY in Q2 2026 to $3.524 billion, and net income of $487.8 million on a 13.84% net margin demonstrates stable profitability. The forward PE of 19.77x versus trailing PE of 23.22x implies expected earnings growth of roughly 17.5%, and the PEG ratio of 0.38 (though volatile) suggests the stock is not expensive relative to its growth. The 2.67% dividend yield and 61.6% payout ratio provide income, but the negative free cash flow of -$3.148 billion and debt-to-equity of 1.80 are significant concerns. The EV/EBITDA of 11.68x is reasonable for a leveraged utility, but the PB of 2.38x is above the sector norm of 1.8-2.0x.
The biggest risks that could invalidate the thesis are: (1) a breakdown below the 52-week low of $90.87, which would confirm the downtrend and likely trigger further selling; (2) a delay or cancellation of the Meta data-center buildout, which would remove the primary growth catalyst; and (3) a rise in financing costs that strains the balance sheet and forces additional equity dilution. The rating would upgrade to Buy if the stock stabilizes above $105 and the forward PE compresses below 18x, or if the company demonstrates positive free cash flow and reduced leverage. It would downgrade to Sell if revenue growth decelerates below 3% or if the dividend payout ratio exceeds 70% without a clear path to coverage. Relative to its history and peers, Entergy appears fairly valued to slightly overvalued, with the premium justified only by successful execution on the AI/data-center growth strategy.
Sign up to view all
ETR 12-Month Price Forecast
Entergy presents a balanced risk/reward profile, with the potential for significant upside if the Meta data-center buildout succeeds, but substantial downside if execution falters or financing costs rise. The stock's low beta of 0.481 and 2.67% dividend yield make it a defensive holding, but the premium valuation and negative free cash flow are concerning. The analyst consensus is bullish, but the wide target range ($91 to $137) and recent technical weakness suggest uncertainty. I would upgrade to bullish if the stock stabilizes above $105 and the company demonstrates progress on free cash flow generation, or downgrade to bearish if it breaks below $90.87 or if the Meta partnership shows signs of delay.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Entergy's 12-month outlook, with a consensus price target around $122.28 and implied upside of +18.4% versus the current price.
Average Target
$122.28
0 analysts
Implied Upside
+18.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$91 - $137
Analyst target range
Entergy is covered by 20 analysts with a consensus recommendation of "buy" (recommendation mean of 1.74 on a 1-5 scale where 1 is Strong Buy), and the average price target of $122.28 implies roughly 21.2% upside from the current price of $100.91. The consensus leans bullish, with the average target sitting well above the current price and the estimated EPS average of $7.32 for the forward year providing fundamental support for the constructive stance. Notably, the consensus target of $122.28 is above the 52-week high of $118.45, meaning analysts collectively expect the stock to not only recover but exceed its prior peak — a signal of conviction in the growth narrative despite the recent technical weakness. The target range spans from a low of $91.00 (roughly 9.8% below the current price) to a high of $137.00 (about 35.8% above), a spread of $46 or roughly 38% of the midpoint, which signals meaningful disagreement about the company's trajectory. The high target of $137 likely assumes successful execution on the Meta data-center buildout, accelerating rate-base growth, multiple expansion back toward premium utility levels, and continued EPS growth toward the high end of the $6.87-$7.83 estimate range; the low target of $91 essentially prices in margin compression, elevated financing costs, and a de-rating toward the lower end of the utility sector multiple. Institutional ratings show a constructive but not uniformly bullish pattern: recent actions include Evercore ISI upgrading to Outperform from In Line in June 2026, while Morgan Stanley has maintained Equal Weight through September 2026, and firms including Truist (Buy), BMO (Outperform), JP Morgan (Overweight), Barclays (Overweight), and Mizuho (Outperform) have reiterated positive ratings. The absence of recent downgrades and the presence of an upgrade suggest analyst sentiment is stabilizing even as the stock price has fallen, a divergence that could signal the selloff is overdone relative to fundamentals — though the wide target range and the Equal Weight stance from a major house like Morgan Stanley caution that conviction is not universal.
Bulls vs Bears: ETR Investment Factors
The bear case currently has stronger near-term evidence, driven by a -12.34% three-month decline, -29.53% relative underperformance versus SPY over six months, and a deeply negative free cash flow of -$3.148 billion that underscores the capital intensity of the Meta buildout. However, the bull case rests on a powerful long-term catalyst: the Meta data-center partnership and associated $2 billion customer savings plan, which could drive multi-year rate-base growth and earnings accretion. The most important tension is whether Entergy can fund its massive capital expenditure program without excessive dilution or balance-sheet stress while delivering the earnings growth implied by the forward PE compression from 23.2x to 19.8x. If the company executes on the buildout and earns its authorized returns, the current selloff may prove to be an attractive entry point; if financing costs rise or the timeline slips, the premium valuation could compress further toward the sector average.
Bullish
- Analyst consensus sees 21% upside: 20 analysts rate ETR a buy with a mean recommendation of 1.74 and an average price target of $122.28, implying 21.2% upside from the current $100.91. The consensus target sits above the 52-week high of $118.45, signaling analysts expect the stock to recover and exceed its prior peak.
- Meta deal drives rate-base growth: The March 2026 Meta partnership and $2 billion customer savings plan positions Entergy as a direct beneficiary of AI data-center electricity demand. Q2 2026 revenue grew 5.85% YoY to $3.524 billion, and the industrial segment already contributes $1.069 billion, providing a foundation for incremental load growth.
- Forward PE compression implies growth: The forward PE of 19.77x versus trailing PE of 23.22x implies the market expects roughly 17.5% earnings growth over the next year, supported by consensus EPS of $7.32. This growth is underpinned by regulated rate-base expansion and the AI infrastructure buildout.
- Low beta cushions drawdowns: With a beta of 0.481, ETR is roughly 52% less volatile than the broader market, making it a defensive holding in turbulent markets. The max drawdown of -16.8% is modest in absolute terms, and the 2.67% dividend yield with a 61.6% payout ratio offers income stability.
Bearish
- Severe relative underperformance: ETR has underperformed SPY by -6.06% over 1 month, -15.68% over 3 months, and -29.53% over 6 months, while the S&P 500 gained 15.01% over the past year. This persistent weakness signals deep investor skepticism about the growth narrative.
- Negative free cash flow and high debt: Trailing free cash flow is -$3.148 billion as Q2 2026 capex of $2.828 billion consumed all operating cash flow of $1.893 billion. Debt-to-equity of 1.80 is elevated even for a utility, and the current ratio of 0.731 indicates thin short-term liquidity, raising financing and dilution risk.
- Premium valuation leaves no margin: The trailing PE of 23.22x and PB of 2.38x are roughly 20-25% above the typical regulated utility range of 16-19x PE and 1.8-2.0x PB. This premium is vulnerable to de-rating if capital costs rise or the Meta buildout timeline slips.
- Technical downtrend intact: The stock trades at just 36.4% of its 52-week range, with a 3-month decline of -12.34% and a 1-month decline of -5.47%. The short ratio of 7.1 indicates bears are positioned for further weakness, and a breakdown below the 52-week low of $90.87 would confirm the downtrend.
ETR Technical Analysis
Entergy is in a clear intermediate-term downtrend despite a modestly positive 1-year return of +7.84%, with the current price of $100.91 sitting at just 36.4% of its 52-week range (52-week low of $90.87, high of $118.45). That positioning near the lower quartile of the annual range signals the stock has surrendered most of its prior gains and is testing territory where value buyers historically step in, though the persistent slide argues against calling a bottom prematurely. The 6-month change of -12.18% and YTD gain of just +7.51% confirm that the bulk of the year's advance has been erased since the spring peak. Recent momentum is decisively negative and decelerating: the 1-month change of -5.47% and 3-month change of -12.34% show accelerating downside that diverges sharply from the still-positive 1-year trend, a classic bearish divergence that often signals trend reversal rather than mere mean reversion. Relative strength versus SPY is deeply negative across every window — -6.06% over 1 month, -15.68% over 3 months, and -29.53% over 6 months — meaning Entergy has massively underperformed a market that gained 15.01% over the past year, and the short ratio of 7.1 suggests bears are positioned for further weakness. Key technical support rests at the 52-week low of $90.87, roughly 10% below the current price, while resistance is anchored at the 52-week high of $118.45, about 17.4% above; a breakdown below $90.87 would confirm the downtrend and likely trigger momentum-driven selling, whereas a reclaim of $118.45 would signal a full trend reversal. With a beta of just 0.481, Entergy is roughly 52% less volatile than the broader market, which cushions drawdowns but also means it will lag in sharp rallies — a critical consideration for position sizing in a rate-sensitive utility. The max drawdown of -16.8% over the period is modest in absolute terms but notable for a low-beta name, underscoring how much the growth-premium narrative has deflated.
Beta
0.45
0.45x market volatility
Max Drawdown
-16.8%
Largest decline past year
52-Week Range
$91-$118
Price range past year
Annual Return
+5.9%
Cumulative gain past year
| Period | ETR Return | S&P 500 |
|---|---|---|
| 1m | -3.7% | +1.2% |
| 3m | -9.7% | +4.5% |
| 6m | -12.1% | +14.6% |
| 1y | +5.9% | +16.0% |
| ytd | +10.0% | +14.3% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
ETR Fundamental Analysis
Entergy's revenue trajectory remains solidly positive, with Q2 2026 revenue of $3.524 billion representing 5.85% year-over-year growth versus Q2 2025's $3.329 billion, continuing a multi-quarter expansion that has lifted quarterly revenue from $2.847 billion in Q1 2025 to the current level. The sequential progression — $2.848B, $3.329B, $3.812B, $2.959B, $3.188B, and $3.524B across the last six quarters — shows a generally rising trend with expected seasonal winter/spring softness, and the residential segment at $1.154 billion plus industrial at $1.069 billion together account for the majority of the electric revenue base. The industrial segment's scale is particularly important given the Meta data-center deal, which should drive incremental load growth and rate-base expansion over the coming years, though the 5.85% growth rate is steady rather than explosive for a utility levered to an AI infrastructure theme. Profitability is healthy and improving: Q2 2026 net income of $487.8 million on a 13.84% net margin and 29.78% gross margin compares favorably to Q2 2025's $471.95 million and 14.18% net margin, while operating margin of 23.69% reflects the capital-intensive but stable economics of regulated electric utilities. Gross margin has been somewhat volatile (29.78% in Q2 2026 versus 46.93% in Q2 2025 and 68.66% in Q1 2026), largely a function of cost-of-revenue accounting and fuel pass-through timing rather than underlying deterioration, and the trailing net margin of 13.70% with ROE of 10.34% is consistent with a well-run regulated utility earning its authorized returns. The balance sheet is the key risk: debt-to-equity of 1.80 is elevated even by utility standards, the current ratio of 0.731 indicates thin short-term liquidity, and trailing free cash flow is deeply negative at -$3.148 billion as capital expenditure of $2.828 billion in Q2 2026 alone consumes all operating cash flow of $1.893 billion. With a dividend payout ratio of 61.6% and a 2.67% dividend yield, Entergy is funding both its dividend and its massive grid buildout through debt and equity issuance — $676 million of common stock was issued in Q2 2026 — which raises dilution and financing-cost risk if rates stay elevated, though the regulated return framework provides predictable cash flow to service the debt.
Quarterly Revenue
$3.5B
2026-06
Revenue YoY Growth
+5.9%
YoY Comparison
Gross Margin
29.8%
Latest Quarter
Free Cash Flow
$-3.1B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is ETR Overvalued?
Because Entergy is solidly profitable with trailing net income of $487.8 million in the most recent quarter and positive EPS of $0.043 on a trailing basis, the PE ratio is the appropriate primary metric; the trailing PE of 23.22x versus a forward PE of 19.77x implies the market expects meaningful earnings growth of roughly 17.5% over the next year, consistent with the consensus EPS estimate of $7.32 versus the current run-rate. The forward multiple compression from 23.2x to 19.8x suggests investors are pricing in the earnings accretion from rate-base growth tied to the Meta partnership and grid expansion, though the PEG ratio of 0.38 appears artificially low and should be treated with caution given the volatility in the earnings base. On a price-to-sales basis, the PS ratio of 3.16x and EV/Sales of 5.78x reflect the capital-intensive nature of the regulated utility model, while the EV/EBITDA of 11.68x is the more relevant cross-check for a leveraged utility. Relative to the broader utilities sector, Entergy's trailing PE of 23.2x screens at a premium to the typical regulated electric utility range of roughly 16-19x, and its PB ratio of 2.38x is above the sector norm of approximately 1.8-2.0x, implying a premium of roughly 20-25% on both metrics. That premium is partially justified by the above-average 5.85% revenue growth and the AI/data-center load-growth optionality, but it also leaves little margin for error if capital costs rise or the buildout timeline slips — a dynamic that likely explains the recent de-rating. Historically, Entergy's PE has ranged from a low of 5.43x in Q4 2023 to a high of 120.16x in Q2 2024, with the current 23.2x sitting in the middle-to-upper portion of that band; the PS ratio of 3.16x is well below the 14-16x readings seen in early 2026 but above the 7-8x levels of 2022-2023, suggesting the stock is neither cheap nor expensive on its own history. The PB ratio of 2.38x is near the top of its multi-year range (1.41x low in Q3 2023 to 2.95x in Q1 2026), indicating the market is still pricing in optimistic growth expectations even after the recent selloff.
PE
23.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 5x~54x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.7x
Enterprise Value Multiple
Investment Risk Disclosure
Entergy faces significant financial and operational risks stemming from its capital-intensive buildout. Trailing free cash flow is deeply negative at -$3.148 billion, as Q2 2026 capital expenditure of $2.828 billion consumed all operating cash flow of $1.893 billion. Debt-to-equity of 1.80 is elevated even by utility standards, and the current ratio of 0.731 indicates thin short-term liquidity, leaving little cushion if operating cash flow disappoints. The company issued $676 million of common stock in Q2 2026 to help fund its grid expansion, and continued equity issuance could dilute shareholders and pressure EPS growth. Additionally, the dividend payout ratio of 61.6% means the $2.67% dividend yield is not fully covered by free cash flow, forcing reliance on debt markets to sustain the payout while funding growth. Revenue concentration in regulated electric operations across four states exposes Entergy to adverse regulatory rulings, and the industrial segment's $1.069 billion quarterly revenue is heavily tied to the Meta partnership, making execution risk on that single relationship a material vulnerability.
Market and competitive risks are amplified by Entergy's premium valuation and sector rotation dynamics. The trailing PE of 23.22x and PB of 2.38x are roughly 20-25% above the typical regulated utility range of 16-19x PE and 1.8-2.0x PB, leaving little margin for error if interest rates remain elevated or if the AI data-center narrative cools. With a beta of 0.481, Entergy is less volatile than the market, but this also means it will lag in sharp rallies and may underperform if investors rotate into higher-beta growth sectors. The recent news highlighting Energy Transfer's natural gas supply deals with AI data centers underscores rising competition for data-center energy contracts, which could pressure Entergy's ability to secure favorable terms. Furthermore, the stock's -29.53% relative underperformance versus SPY over six months suggests that investors are already de-rating the growth premium, and any regulatory setback or delay in the Meta buildout could accelerate this trend.
The worst-case scenario for Entergy would involve a combination of rising financing costs, delays in the Meta data-center buildout, and adverse regulatory outcomes that compress returns. If the Federal Reserve keeps rates higher for longer, Entergy's cost of debt could rise, making its negative free cash flow and 1.80 debt-to-equity ratio increasingly burdensome. A breakdown below the 52-week low of $90.87 would confirm the downtrend and likely trigger momentum-driven selling, potentially pushing the stock toward the analyst low target of $91.00, which is roughly 9.8% below the current price. In a more severe scenario, if the Meta partnership fails to deliver expected load growth and the stock de-rates to the lower end of the utility sector multiple (around 16x forward earnings), the shares could fall to the mid-$80s, representing a decline of approximately 15-20% from the current $100.91. The max drawdown of -16.8% over the past period provides a recent reference, but a sustained bear case could see losses exceeding 20% from current levels.
FAQ
The most severe risk is financial: negative free cash flow of -$3.148 billion and debt-to-equity of 1.80 mean Entergy relies on debt and equity issuance to fund its dividend and capital expenditures, exposing it to rising interest rates and dilution. Second, execution risk on the Meta data-center buildout is high; any delay or cancellation would remove the primary growth catalyst and likely trigger a de-rating. Third, regulatory risk is significant, as adverse rulings in Arkansas, Louisiana, Mississippi, or Texas could disallow timely cost recovery and compress returns. Fourth, competitive risk is emerging, with companies like Energy Transfer securing AI data-center gas supply deals, potentially reducing Entergy's ability to win favorable contracts. Finally, technical risk is elevated, with the stock in a downtrend and a breakdown below $90.87 likely to accelerate selling.
The 12-month forecast for Entergy is balanced, with a base case probability of 55% targeting a range of $105 to $122, a bull case probability of 25% targeting $122 to $137, and a bear case probability of 20% targeting $85 to $91. The base case assumes steady revenue growth of 4-6% and achievement of consensus EPS of $7.32, while the bull case requires successful execution on the Meta buildout and favorable regulatory outcomes. The bear case is driven by rising financing costs, buildout delays, and a breakdown below the 52-week low of $90.87. The most likely scenario is the base case, with the key assumption being that Entergy meets its earnings estimates without major setbacks.
Entergy appears fairly valued to slightly overvalued relative to its peers and history. The trailing PE of 23.22x and PB of 2.38x are roughly 20-25% above the typical regulated utility range of 16-19x PE and 1.8-2.0x PB. The forward PE of 19.77x implies expected earnings growth of 17.5%, which is ambitious but supported by the Meta partnership. On a price-to-sales basis, the PS ratio of 3.16x is above the 7-8x levels of 2022-2023 but below the 14-16x readings of early 2026, suggesting the stock is neither cheap nor expensive on its own history. The market is pricing in successful execution of the growth strategy, leaving little margin for error.
Entergy is a reasonable buy for income-oriented investors with a long-term horizon, but it carries above-average risk relative to typical utilities. The stock offers a 2.67% dividend yield and trades at a forward PE of 19.77x, with analyst consensus targeting $122.28 (21.2% upside). However, the negative free cash flow of -$3.148 billion and debt-to-equity of 1.80 are significant concerns, and the stock has underperformed SPY by -29.53% over six months. For investors comfortable with the execution risk of the Meta data-center buildout, the current price near $100.91 could represent a decent entry point, but a breakdown below the 52-week low of $90.87 would be a clear sell signal.
Entergy is best suited for long-term investment, with a suggested minimum holding period of 2-3 years to allow the Meta data-center buildout to translate into rate-base growth and earnings accretion. The stock's low beta of 0.481 and 2.67% dividend yield make it a defensive holding, but the negative free cash flow and high debt-to-equity ratio introduce volatility that could punish short-term traders. The technical downtrend and short ratio of 7.1 suggest near-term weakness may persist, making it a poor candidate for short-term trading. Long-term investors can look through the current capital expenditure cycle, but they must be comfortable with the execution and financing risks. A dividend reinvestment strategy could enhance returns over a multi-year horizon.