Entergy
ETR
$108.19
+1.99%
Entergy Corporation is a holding company operating five regulated, vertically integrated electric utilities that generate, transmit, and distribute power to more than 3 million customers across Arkansas, Louisiana, Mississippi, and Texas, backed by roughly 25 gigawatts of rate-regulated owned and leased generation capacity. As one of the largest power producers in the U.S. and a historically significant nuclear operator, Entergy occupies a distinct position as a Gulf South utility with concentrated industrial load exposure and a growing role as a power provider to large-scale data center and industrial customers. The current investor narrative centers on the landmark partnership with Meta, which underpins a roughly $2 billion customer savings and grid expansion plan, positioning Entergy as a direct beneficiary of AI-driven electricity demand growth in its service territory. That growth story is being weighed against a premium valuation, elevated capital expenditure requirements, and a stock that has lagged the broader market over the past six months despite a strong year-to-date performance, leaving investors to debate whether the data center catalyst justifies the multiple.…
ETR
Entergy
$108.19
Related headlines
ETR 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Entergy's 12-month outlook, with a consensus price target around $120.24 and implied upside of +11.1% versus the current price.
Average Target
$120.24
0 analysts
Implied Upside
+11.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$91 - $131
Analyst target range
Entergy is covered by 20 analysts with a consensus recommendation of "buy" and a mean rating of 1.74 on a scale where 1 is a strong buy, reflecting broad institutional confidence in the growth story. The average target price of $121.18 implies roughly 15.3% upside from the current price of $105.11, a meaningful premium that signals the sell-side sees the recent pullback as an opportunity rather than a deterioration. The consensus leans bullish, supported by recent ratings activity that includes Evercore ISI's upgrade to Outperform from In Line in June 2026 and reiterated Buy/Overweight/Outperform ratings from Truist, BMO, JP Morgan, Barclays, and Mizuho, with Morgan Stanley maintaining Equal Weight as the notable neutral voice.
The target range spans $91.00 to $133.00, a spread of $42 or roughly 40% of the current price, indicating meaningful dispersion in analyst views. The high target of $133 assumes successful execution on the Meta partnership, accelerating rate base growth from data center demand, and multiple expansion toward the upper end of the utility peer group, while the low target of $91 — essentially at the 52-week low — prices in margin compression, adverse regulatory outcomes, or delays in the capital program that would pressure the premium valuation. The wide spread reflects genuine uncertainty around the timing and magnitude of the data center catalyst rather than a lack of conviction, and with 20 analysts covering the name and a consensus EPS estimate of $7.31 for the forward period, coverage is deep and institutional interest is strong, supporting efficient price discovery.
Bulls vs Bears: ETR Investment Factors
The bull case rests on a genuinely differentiated growth catalyst — the Meta partnership and $2 billion grid expansion plan — layered on steady 5.85% revenue growth, a 0.38 PEG ratio, and a 15.3% implied upside to the $121.18 analyst average target. The bear case is equally concrete: free cash flow of -$3.15 billion, debt-to-equity of 1.80, interest coverage near 2.03x, and a 2.38x price-to-book that prices in optimistic rate base growth. On balance the evidence slightly favors the bulls, because the sell-side consensus (1.74 mean rating, 20 analysts) and the growth-adjusted valuation support the thesis, while the balance sheet strain is normal for a utility in a heavy capex cycle. The single most important tension is whether the Meta-driven data center load actually converts into approved rate base and earnings growth fast enough to justify the premium multiple — if regulators deliver, the stock re-rates toward $133; if rate cases lag or capex overruns, the 23x PE compresses and the $91 low comes back into play.
Bullish
- Meta deal anchors visible load growth: The landmark Meta partnership underpins a roughly $2 billion customer savings and grid expansion plan, giving Entergy a differentiated demand catalyst that most regulated utilities lack. With industrial sales already at $1.069 billion in Q2 2026 and a service territory concentrated in the Gulf South, the deal converts AI-driven electricity demand into rate base expansion rather than speculative narrative.
- Analyst consensus implies 15.3% upside: Twenty analysts cover ETR with a consensus 'buy' rating (mean 1.74) and an average target of $121.18 versus the $105.11 current price, implying roughly 15.3% upside. The high target of $133 sits 26.5% above the current price, and Evercore ISI upgraded to Outperform in June 2026, with Truist, BMO, JP Morgan, Barclays and Mizuho reiterating bullish ratings.
- Revenue growth steady at 5.85% YoY: Q2 2026 revenue of $3.524 billion rose 5.85% from $3.329 billion a year earlier, extending a multi-quarter uptrend from $2.742 billion in Q4 2024 to $3.188 billion in Q1 2026. That is a healthy mid-single-digit growth rate for a regulated utility, and consensus forward revenue of $19.94 billion implies continued expansion.
- PEG of 0.38 signals growth-adjusted value: The trailing PE of 23.22x versus forward PE of 20.60x implies roughly 12.7% expected earnings growth, producing a PEG ratio of just 0.38. Consensus forward EPS of $7.31 against the current price implies a far more reasonable earnings multiple than the GAAP trailing figure suggests, making the growth-adjusted valuation attractive despite the headline premium.
Bearish
- Deeply negative free cash flow of -$3.15B: Trailing free cash flow is -$3.148 billion as Q2 2026 capital expenditures of $2.828 billion dwarf operating cash flow of $1.893 billion. The company is funding this gap with debt and equity issuance — $676.4 million of stock in Q2 2026 and $352.3 million in Q1 2026 — diluting shareholders and raising the risk profile.
- Leverage and thin interest coverage: Debt-to-equity of 1.80 and total-debt-to-capitalization of 65.2% reflect heavy borrowing, while interest coverage of roughly 2.03x leaves limited cushion on a $410 million quarterly interest expense. A current ratio of 0.731 signals tight liquidity, meaning the capital program depends on timely regulatory rate relief.
- Premium valuation versus utility peers: The 23.22x trailing PE and 2.38x price-to-book sit roughly 20-30% above the typical regulated utility's high-teens PE and 1.5x-2.0x book. Price-to-book is near the top of its historical 1.4x-2.9x range, leaving little room for execution missteps on the Meta partnership or adverse rate case outcomes.
- Six-month underperformance of -9.01%: Despite an 11.99% year-to-date gain, the stock is down 9.01% over six months and 7.18% over three months versus SPY's +7.48% and +2.69%, producing relative strength readings of -16.49 and -9.87. The stock sits 66% of the way through its 52-week range at $105.11, roughly $13.34 below the $118.45 high, showing momentum has stalled.
ETR Technical Analysis
Entergy is in a range-bound consolidation with a modestly positive longer-term tilt, having gained 9.47% over the past year while trading at roughly 66% of its 52-week range of $90.87 to $118.45, with the current price of $105.11 sitting about $13.34 below the high and $14.24 above the low. This mid-to-upper range positioning suggests neither momentum overextension nor a falling-knife setup, but rather a stock digesting gains after a strong run; the 11.99% year-to-date advance confirms the underlying trend remains constructive even as the stock has stalled below its highs. The 52-week high of $118.45 remains the key overhead reference, and a decisive break above it would signal a resumption of the uptrend, while a failure to hold the mid-range would put the $90.87 low back in play.
Short-term momentum is improving but remains inconsistent with the longer-term picture: the stock is up 2.73% over the past month versus a 1.22% gain for SPY, producing a relative strength of +1.51, yet it is down 7.18% over three months and 9.01% over six months against SPY's +2.69% and +7.48%, yielding relative strength readings of -9.87 and -16.49 respectively. This divergence — positive one-month momentum against a negative three- and six-month trend — points to a mean-reversion bounce off the September lows near $98 rather than a confirmed trend reversal, and the recent recovery from $98.10 on September 28 to $105.11 on October 16 supports that interpretation. The stock's beta of just 0.448 means it moves less than half as much as the market, so the recent outperformance is meaningful in relative terms but reflects a low-volatility utility profile rather than aggressive accumulation.
Key technical levels are well defined: support sits at the 52-week low of $90.87, with an intermediate floor around the September trough near $98, while resistance is anchored at the $118.45 52-week high. A breakout above $118.45 would likely require a fundamental catalyst — such as favorable regulatory outcomes or data center contract announcements — and would signal the market is repricing the growth story, whereas a breakdown below $98 would threaten the year-to-date gains and expose the $90.87 low. The low beta of 0.448 and a maximum drawdown of -16.8% indicate a relatively defensive risk profile, meaning position sizing can be larger for volatility-adjusted exposure, but the muted beta also caps upside torque in a broad rally. Volume of roughly 2.24 million shares and a short ratio of 5.7 days suggest moderate liquidity with limited short-selling pressure, reducing the risk of a violent squeeze in either direction.
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
+12.7%
Cumulative gain past year
| Period | ETR Return | S&P 500 |
|---|---|---|
| 1m | +6.9% | -1.2% |
| 3m | -6.7% | +3.4% |
| 6m | -4.8% | +7.0% |
| 1y | +12.7% | +14.4% |
| ytd | +15.3% | +12.0% |
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ETR Fundamental Analysis
Revenue is growing at a steady, utility-appropriate pace: Q2 2026 revenue of $3.524 billion rose 5.85% year over year from $3.329 billion in Q2 2025, extending a multi-quarter uptrend that has carried quarterly revenue from $2.742 billion in Q4 2024 to $2.959 billion in Q4 2025, $3.188 billion in Q1 2026, and $3.524 billion in Q2 2026. The revenue mix is dominated by industrial sales at $1.069 billion and residential at $1.154 billion, with commercial contributing $823 million, reflecting a customer base heavily weighted toward industrial load — precisely the segment poised to benefit from data center and manufacturing demand in the Gulf South. This trajectory implies a mid-single-digit growth utility with an improving demand backdrop, and the Meta partnership provides a visible catalyst for accelerating load growth and rate base expansion over the coming years.
Profitability is solid and improving: Q2 2026 net income of $487.8 million produced a net margin of 13.84%, up from 14.18% in Q2 2025 on a slightly lower revenue base but with net income rising from $471.95 million, while the trailing net margin stands at 13.70% and the operating margin at 23.59%. Gross margin has been volatile quarter to quarter — 29.78% in Q2 2026 versus 46.93% in Q2 2025 and 68.66% in Q1 2026 — largely a function of how cost of revenue is classified across periods, but the operating income line is more stable at $834.7 million in Q2 2026 versus $837.4 million a year earlier, indicating underlying profitability is holding steady. The 10.34% ROE and 2.68% ROA are typical for a capital-intensive regulated utility, where returns are governed by rate cases rather than competitive dynamics, and the 2.67% dividend yield with a 61.6% payout ratio reflects a sustainable, income-oriented shareholder return profile.
Balance sheet leverage is the key risk: debt-to-equity of 1.80 and a total-debt-to-capitalization ratio of 65.2% reflect the heavy borrowing typical of utility capital programs, and free cash flow is deeply negative at -$3.148 billion on a trailing basis as capital expenditures of $2.828 billion in Q2 2026 alone outstrip operating cash flow of $1.893 billion. The company is funding its growth through a combination of debt issuance and equity — $676.4 million of common stock issued in Q2 2026 and $352.3 million in Q1 2026 — which dilutes shareholders but is necessary to finance grid expansion. A current ratio of 0.731 and interest coverage of roughly 2.03x indicate a tight liquidity position and limited cushion on interest obligations, meaning the investment case depends on regulatory approval of rate increases to support the capital program and service the growing debt load.
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
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Valuation Analysis: Is ETR Overvalued?
Because Entergy is profitable — Q2 2026 net income of $487.8 million and trailing EPS of $0.0434 on a GAAP basis, though adjusted EPS is far higher — the PE ratio is the appropriate primary metric, and the trailing PE of 23.22x versus a forward PE of 20.60x implies the market expects earnings growth of roughly 12.7% over the next twelve months. The gap between trailing and forward multiples is modest for a utility, reflecting the predictable, regulated earnings stream, and the PEG ratio of 0.38 suggests the stock is inexpensive relative to its expected growth rate. The 2.67% dividend yield and 3.16x price-to-sales ratio round out a valuation profile that is rich on absolute multiples but supported by a visible growth catalyst.
Against the broader utility sector, Entergy's 23.22x trailing PE and 2.38x price-to-book sit at a premium to the typical regulated electric utility, which often trades in the high-teens PE range and 1.5x-2.0x book, implying a premium of roughly 20-30% on earnings and book value. That premium is defensible given the data center-driven load growth story and the Meta partnership, which offers a differentiated growth runway versus peers with flat demand, but it also leaves little room for execution missteps. The 11.68x EV/EBITDA and 5.90x EV/Sales are consistent with a premium utility, and the 0.38 PEG ratio argues the growth-adjusted valuation remains attractive despite the headline premium.
Historically, Entergy's PE has ranged widely — from 5.4x in Q4 2023 and 9.1x in Q3 2022 to 44.4x in Q4 2025 and 33.4x in Q1 2026 — with the current 23.22x sitting in the middle-to-upper portion of that band, well above the 2022-2023 lows but below the recent peak multiples. The price-to-book ratio of 2.38x is near the high end of its historical range of roughly 1.4x to 2.9x, suggesting the market is pricing in optimistic expectations for rate base growth and data center demand. This positioning means the stock is not a deep-value opportunity but rather a fairly-to-fully valued growth utility, where further multiple expansion requires tangible progress on the Meta partnership and regulatory approvals.
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
Financial and operational risks are dominated by the capital program's funding gap. Trailing free cash flow of -$3.148 billion reflects Q2 2026 capex of $2.828 billion against operating cash flow of $1.893 billion, forcing reliance on debt and equity issuance — $676.4 million of stock sold in Q2 2026 alone. Debt-to-equity of 1.80, total-debt-to-capitalization of 65.2%, a current ratio of 0.731, and interest coverage of roughly 2.03x on $410 million of quarterly interest expense mean the balance sheet has limited slack if rate relief is delayed. Earnings quality is also a concern: trailing GAAP EPS of $0.0434 and gross margin swinging from 68.66% in Q1 2026 to 29.78% in Q2 2026 show how cost classification can distort reported results.
Market and competitive risks center on valuation compression. At 23.22x trailing PE and 2.38x book, ETR trades roughly 20-30% above typical regulated utility multiples, and price-to-book sits near the top of its 1.4x-2.9x historical band; a rotation away from premium utilities or disappointment on data center timelines could compress the multiple toward the high-teens PE range, implying a 20%+ de-rating. The beta of 0.448 cushions against broad market selloffs but also caps upside torque in rallies, as evidenced by the -16.49 six-month relative strength versus SPY. Competitive threats include rival utilities and merchant generators courting the same hyperscaler load, while regulatory risk across four states (Arkansas, Louisiana, Mississippi, Texas) means any adverse rate case or disallowance on the Meta-related grid spend would directly hit the growth narrative.
The worst-case scenario is a chain of capex overruns on the grid expansion, delayed or reduced rate case approvals, and a hyperscaler slowdown that pushes the data center catalyst out by years — all while the company carries $3.15 billion of negative free cash flow and issues more equity to plug the gap. In that scenario the stock would likely retest its 52-week low of $90.87, which is essentially the analyst low target of $91.00, representing roughly -13.5% from the current $105.11. A more severe outcome — a broad utility de-rating combined with a failed Meta contract — could push toward the historical max drawdown of -16.8%, implying a loss of about -17% to -20% from current levels.