ETR
ETREntergy Corporation is a utility company engaged in electric power production and retail distribution.
It is a key regulated utility operator in the American South, known for its stable earnings from its essential service territory.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy ETR Today?
Analysis of Entergy Corp (ETR)
Technical Perspective ETR displays defensive behavior, with modest monthly gains but underperformance against the broader market over three months. Currently trading near the upper end of its 52-week range, the stock shows limited immediate upside potential and may be approaching overbought levels. This suggests caution for short-term traders seeking significant momentum.
Fundamental Outlook Entergy demonstrates resilient profitability with strong net income, though gross margin compression is a concern. While leverage is manageable, the low current ratio indicates potential liquidity constraints. Operational efficiency metrics are modest, characteristic of the utility sector, but the healthy cash flow supports stability.
Valuation and Risk Assessment Valuation sends mixed signals: the low PEG ratio hints at undervaluation relative to growth, but elevated EV/EBITDA and price-to-sales ratios imply a stretched valuation. Risks are moderated by low volatility and manageable drawdowns, though regulatory and interest rate exposures inherent to utilities persist.
Investment Recommendation ETR is suited for income-focused investors seeking defensive exposure with moderate growth. Its stable cash flows and manageable debt support a hold strategy, but current pricing near yearly highs limits near-term upside. Consider accumulating on pullbacks rather than buying at present levels for better risk-reward balance.
*Note: This is not investment advice, for reference only.*
ETR 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Of course. Here is a 12-month outlook for Entergy Corp (ETR) based on the provided analysis.
12-Month Outlook for Entergy Corp (ETR)
1. Key Catalysts: The primary catalysts are its stable, defensive business model, which should appeal to investors seeking income and shelter during potential economic uncertainty. The company's healthy cash flow generation supports its dividend and provides a foundation for steady, regulated earnings growth.
2. Potential Risks: Key risks include sensitivity to rising interest rates, which could pressure valuation, and potential regulatory challenges that could impact rate cases and profitability. Furthermore, the stock's current price near 52-week highs and stretched valuation metrics suggest limited near-term upside and vulnerability to a pullback.
3. Target Price Range: While a specific analyst target is not provided, the analysis suggests the stock is fairly to fully valued at current levels. A more attractive entry point would likely be on a market or sector-driven pullback. For the next 12 months, expect moderate, single-digit returns primarily driven by the dividend, with price appreciation contingent on a successful navigation of the interest rate environment.
Wall Street Consensus
Most Wall Street analysts are optimistic about ETR's 12-month outlook, with consensus target around $95.17, indicating expected upside potential.
Bulls vs Bears: ETR Investment Factors
Overall, ETR has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Institutional Investment: TCW GROUP opened a new $33.2 million position in ETR stock.
- Analyst Upgrade: UBS raised Entergy price target to $105 with Buy rating.
- Infrastructure Investment: Entergy Louisiana broke ground on new generation facilities for reliability.
- Investor Engagement: CEO and senior leaders meeting investors at EEI Financial Conference.
- Sector Performance: Entergy stock potentially outpacing utilities peers this year.
Bearish
- Conflicting Analyst View: JP Morgan lowered Entergy price target from $113 to $108.
- Sector Headwinds: Utilities sector facing regulatory and interest rate challenges.
ETR Technical Analysis
Overall Assessment: ETR exhibits defensive characteristics with modest gains amid general market volatility, underperforming the broader market over the recent quarter while demonstrating low volatility relative to the benchmark.
Short-term Performance: The stock has shown a modest 1.13% gain over the past month but remains down 1.31% over three months, significantly underperforming the market by 4.68% during this period, highlighting its defensive posture amid broader market movements.
Current Position: Trading at $94.37, ETR sits approximately 80% toward the upper end of its 52-week range ($75.55-$98.58), suggesting the stock is approaching overbought territory with limited upside to its recent high of $98.58.
| Period | ETR Return | S&P 500 |
|---|---|---|
| 1m | +3.0% | +1.3% |
| 3m | -0.1% | +5.7% |
| 6m | +16.8% | +10.6% |
| 1y | +20.5% | +16.5% |
| ytd | +1.4% | +1.1% |
ETR Fundamental Analysis
Revenue & Profitability Q3 2025 revenue increased to $3.8 billion from $3.3 billion in Q2, showing solid growth. However, gross profit margin declined from 46.9% to 35.2% sequentially, indicating compression despite higher revenue. The company maintained strong net income of $698 million with an 18.3% net margin, demonstrating profitability resilience.
Financial Health ETR shows moderate leverage with a 43.4% debt ratio and debt-to-equity of 1.80, which is manageable for a utility. The interest coverage ratio of 10.1 indicates sufficient earnings to service debt obligations. However, the current ratio of 0.71 suggests potential liquidity constraints in meeting short-term obligations.
Operational Efficiency Return on equity of 4.1% and asset turnover of 0.05 indicate suboptimal efficiency in utilizing capital. The operating cash flow to sales ratio of 56% is healthy, supporting operational flexibility. The cash conversion cycle of 23 days shows reasonable working capital management despite modest inventory turnover.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Based on the valuation metrics provided, Entergy appears to show mixed signals. The forward PE of 14.6 and a notably low PEG ratio of 0.33 suggest the stock may be undervalued when factoring in its expected earnings growth rate. However, elevated ratios such as the EV/EBITDA of 42.0 and a PS ratio of 3.3 are quite high, indicating the valuation is stretched based on sales and cash flow metrics.
A peer comparison to determine relative valuation is not possible at this time as the relevant industry average data is unavailable. To accurately assess whether Entergy trades at a premium or discount, benchmarking these key metrics against sector peers is essential. The analysis would therefore benefit significantly from the inclusion of comparable industry averages for context.
Investment Risk Disclosure
Volatility Risk: With a Beta of 0.648, Entergy's (ETR) stock exhibits significantly lower volatility than the broader market, implying less price sensitivity to market swings. This is further evidenced by a manageable one-year maximum drawdown of -10.1%, suggesting a relatively stable performance profile from a volatility perspective.
Other Risks: The absence of any notable short interest removes a potential source of downward pressure and indicates a lack of material negative speculative sentiment in the market. However, as a utility, ETR remains exposed to regulatory and interest rate risks, which can impact profitability and are not captured by short interest figures.
FAQs
Neutral. Trading near its 52-week high limits near-term upside, while mixed fundamentals show profitability resilience but modest operational efficiency. The low-beta, defensive profile offers stability but may lead to underperformance in a rising market. Suitable for income-focused, risk-averse investors seeking steady dividends with muted volatility.
Based on the provided metrics, ETR stock appears to be fairly valued to slightly overvalued.
The valuation presents a mixed picture. While the forward P/E of 14.6 and the very low PEG ratio of 0.33 suggest significant undervaluation based on earnings growth expectations, other metrics like the Price-to-Sales (P/S) ratio of 3.28 and an EV/EBITDA of 42.0 are quite elevated, indicating the stock is priced richly relative to its sales and cash flow.
The key reasons for this valuation are: 1. Growth Expectations: The primary bullish signal is the low PEG ratio, which implies the market may not be fully pricing in the company's expected earnings growth. 2. Profitability vs. Price: The high P/S and EV/EBITDA ratios suggest that the current stock price is demanding relative to the company's current revenue and operational profitability, despite its solid net income margin. 3. Sector Context: As a utility, ETR's valuation is heavily influenced by interest rates and its dividend yield. Without industry averages for direct comparison, it's difficult to definitively call it overvalued, but the high cash flow multiples are a concern.
Of course. Based on the provided information, here are the key risks of holding Entergy (ETR) stock, ordered by importance.
1. Regulatory and Rate-Setting Risk: As a regulated utility, ETR's profitability is highly dependent on securing favorable outcomes from state regulatory commissions for rate increases and capital investment recovery, which can be unpredictable and politically charged. 2. Operational Profitability Risk: The sequential decline in gross profit margin from 46.9% to 35.2%, despite revenue growth, indicates potential pressure from rising operating costs (e.g., fuel, maintenance) that may not be fully offset by rates, directly threatening core earnings. 3. Financial Liquidity Risk: The current ratio of 0.71 signals a potential challenge in meeting short-term obligations with short-term assets, which could necessitate borrowing or asset sales under stressful conditions. 4. Capital Efficiency and Growth Risk: The low return on equity (4.1%) and asset turnover (0.05) suggest inefficient use of shareholder capital, potentially limiting its ability to fund growth internally and deliver attractive returns, especially in a high-interest-rate environment.
Of course. Here is a forecast for Entergy Corp (ETR) stock performance through 2026.
Based on a combination of fundamental analysis, its position as a regulated utility, and prevailing macroeconomic conditions, the forecast for ETR through 2026 is for steady, moderate growth primarily driven by its reliable dividend income.
1. Target Price Range: The projected target price range for late 2026 is $105 - $120. This represents a base case of low single-digit annual price appreciation, with the bull case dependent on a favorable interest rate environment. 2. Key Growth Drivers: The primary growth drivers are its stable, regulated earnings base, continued investment in grid modernization and reliability, and potential growth from the industrial electrification trend in its Southern US service territory. 3. Main Assumptions: This forecast assumes relatively stable interest rates (or a declining rate environment by 2026), successful regulatory outcomes for rate cases and capital investment recovery, and no major weather-related catastrophic costs. 4. Uncertainty Statement: The forecast is highly sensitive to Federal Reserve interest rate policy, as utility valuations are inversely correlated with rates; an unforeseen surge in rates could significantly limit price appreciation, keeping total returns reliant almost entirely on the dividend.
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