Entergy
ETR
$104.62
-2.53%
Entergy Corporation is a holding company that owns and operates five regulated, vertically integrated electric utilities serving approximately 3 million customers across Arkansas, Louisiana, Mississippi, and Texas, with a generation fleet of 27 gigawatts, including a significant nuclear presence. As one of the largest power producers in the U.S., Entergy is a key player in the regulated electric utility industry, distinguished by its scale and its strategic focus on the Gulf South region. The current investor narrative centers on the company's landmark $2 billion savings plan with Meta, which is expected to fund a major grid expansion and drive long-term growth, while also raising questions about the sustainability of its premium valuation and the execution risks associated with large-scale industrial load additions.…
ETR
Entergy
$104.62
Related headlines
Investment Opinion: Should I buy ETR Today?
Entergy is rated a Buy based on its accelerating revenue growth, strategic Meta partnership, and attractive valuation on a PEG basis. The consensus analyst target of $123.53 implies 18.1% upside, and the recent upgrade to Outperform supports positive sentiment. The company's revenue growth of 11.97% YoY and forward PE of 20.53x, combined with a PEG of 0.38, indicate that the stock is undervalued relative to its growth prospects.
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ETR 12-Month Price Forecast
The AI assessment leans bullish, driven by strong revenue momentum and a favorable valuation on a PEG basis. However, confidence is medium due to execution risks and high debt levels. The stock's defensive beta and dividend yield offer downside support, but the premium valuation requires continued growth to justify. If revenue growth sustains above 10% and the Meta deal progresses without major issues, the stock is likely to appreciate toward the average target. Conversely, any signs of deceleration or cost overruns would prompt a downgrade to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Entergy's 12-month outlook, with a consensus price target around $123.33 and implied upside of +17.9% versus the current price.
Average Target
$123.33
0 analysts
Implied Upside
+17.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$91 - $139
Analyst target range
The target price range spans from a low of $91.00 to a high of $139.00, representing a wide spread of $48, which indicates significant uncertainty about the stock's future performance. The high target of $139 implies a 32.8% upside from the current price, suggesting that some analysts expect the Meta-driven growth to lead to substantial earnings and multiple expansion. Conversely, the low target of $91 implies a 13.0% downside, which could reflect concerns about regulatory hurdles, cost overruns in grid expansion, or a potential slowdown in industrial demand. The recent upgrade by Evercore ISI from 'In Line' to 'Outperform' in June 2026 suggests a positive shift in sentiment, but the wide range of targets highlights the debate around the sustainability of Entergy's growth story.
Bulls vs Bears: ETR Investment Factors
Entergy presents a compelling growth story driven by the Meta partnership and accelerating revenue, but it comes with a premium valuation and significant execution risks. The bull case is supported by strong analyst targets and a low PEG ratio, while the bear case highlights high debt, negative free cash flow, and recent price weakness. Currently, the bull case has slightly stronger evidence due to the tangible revenue growth and strategic positioning, but the key tension lies in whether the company can execute its grid expansion without cost overruns or regulatory setbacks. If execution falters, the stock could see multiple compression and a decline toward the low target of $91.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 11.97% YoY to $3.19B, up from 8.4% growth in Q1 2025, indicating accelerating demand. This is driven by residential and industrial segments, with industrial revenue of $934M likely boosted by the Meta data center deal.
- Meta Partnership Unlocks Growth: The $2 billion savings plan with Meta funds a major grid expansion, positioning Entergy for long-term growth. This landmark deal is expected to drive industrial load additions and customer savings, supporting future revenue and earnings growth.
- Strong Analyst Sentiment: With 20 analysts, the consensus rating is 'Buy' (mean 1.74) and the average target price is $123.53, implying 18.1% upside from the current price of $104.62. The recent Evercore ISI upgrade to 'Outperform' reflects positive sentiment.
- Attractive Valuation on PEG: The PEG ratio is 0.38, well below 1, suggesting the stock is undervalued relative to its expected earnings growth. The forward PE of 20.53x is reasonable for a utility with accelerating growth and a 13% expected earnings increase.
Bearish
- Premium Valuation vs. Peers: Entergy trades at a trailing PE of 23.22x and EV/EBITDA of 11.68x, which is above the typical utility sector average. This premium leaves little room for error and could compress if growth disappoints.
- High Debt Levels: The debt-to-equity ratio is 1.80, indicating significant leverage. With interest expenses of $379.7M in Q1 2026, rising interest rates could pressure earnings and free cash flow.
- Negative Free Cash Flow: TTM free cash flow is -$3.0B, reflecting heavy capital expenditures for grid expansion. This could strain the balance sheet and limit dividend growth or require additional debt issuance.
- Recent Price Weakness: The stock has fallen 8.93% in the past month and 6.92% in the past three months, underperforming the S&P 500 (relative strength -11.38% over 1 month). This suggests waning momentum and potential investor concerns.
ETR Technical Analysis
Entergy's stock has demonstrated a sustained uptrend over the past year, with a 1-year price change of +17.26%, though it has recently pulled back from its 52-week high of $118.45. As of the latest close, the stock trades at $104.62, which is approximately 88% of its 52-week range (calculated as (104.62 - 86.4) / (118.45 - 86.4) = 0.88), indicating it remains in the upper portion of its range but has retreated from the highs. This positioning suggests that while the longer-term trend is bullish, the stock is no longer at overbought extremes, offering a potential entry point for investors who missed the earlier rally.
Beta
0.49
0.49x market volatility
Max Drawdown
-11.3%
Largest decline past year
52-Week Range
$86-$118
Price range past year
Annual Return
+17.3%
Cumulative gain past year
| Period | ETR Return | S&P 500 |
|---|---|---|
| 1m | -8.9% | +3.6% |
| 3m | -6.9% | +2.7% |
| 6m | +0.6% | +11.4% |
| 1y | +17.3% | +18.7% |
| ytd | +11.5% | +12.3% |
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ETR Fundamental Analysis
Entergy's revenue trajectory shows robust growth, with the most recent quarter (Q1 2026) reporting revenue of $3.19 billion, a 11.97% year-over-year increase from $2.85 billion in Q1 2025. This growth is accelerating, as the prior four quarters (Q2 2025 through Q4 2025) saw revenue of $3.33B, $3.81B, $2.96B, and $3.19B, respectively, with the Q1 2026 growth rate of 11.97% exceeding the 8.4% growth seen in Q1 2025. The revenue growth is driven primarily by the residential segment ($1.15B) and industrial segment ($934M), which together account for over 65% of total revenue, reflecting strong demand from both households and large industrial customers, likely supported by the Meta data center deal.
Quarterly Revenue
$3.2B
2026-03
Revenue YoY Growth
+12.0%
YoY Comparison
Gross Margin
68.7%
Latest Quarter
Free Cash Flow
$-3.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ETR Overvalued?
Given that Entergy is profitable with a trailing net income of $390.8 million in Q1 2026, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 23.22x, while the forward PE is 20.53x, indicating that the market expects earnings growth of approximately 13% over the next year (calculated as (23.22/20.53 - 1) = 13.1%). This gap between trailing and forward multiples suggests that investors are pricing in continued earnings expansion, which is consistent with the company's growth initiatives and the Meta partnership.
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 risks are elevated due to Entergy's high leverage, with a debt-to-equity ratio of 1.80 and interest expenses of $379.7M in Q1 2026. The company's negative free cash flow of -$3.0B TTM indicates heavy capital spending, which may require additional debt or equity issuance, potentially diluting shareholders. Additionally, the payout ratio of 61.6% leaves limited room for dividend increases if earnings falter, and the current ratio of 0.73 suggests potential liquidity constraints in the short term.
FAQ
The key risks include: 1) Financial risk from high debt (D/E of 1.80) and negative free cash flow (-$3.0B TTM), which could strain the balance sheet. 2) Execution risk with the Meta deal, as cost overruns or regulatory delays could derail growth. 3) Market risk from rising interest rates, which could increase borrowing costs and compress utility valuations. 4) Competitive risk from other utilities or alternative power sources. The most severe risk is a combination of these factors leading to earnings disappointments and a de-rating of the stock.
The 12-month forecast is bullish, with a base case target of $110-$125 (50% probability), a bull case of $120-$139 (30% probability), and a bear case of $86-$100 (20% probability). The average analyst target is $123.53, implying 18.1% upside. The most likely scenario is steady growth driven by the Meta deal, with revenue growth around 10-12% and earnings growth of 13%. If execution is flawless, the stock could reach the high target of $139, but any setbacks could push it toward the low target of $91.
Entergy's trailing PE of 23.22x and forward PE of 20.53x are above the utility sector average, suggesting a premium valuation. However, the PEG ratio of 0.38 indicates that the stock is undervalued relative to its expected earnings growth of 13%. The market is pricing in continued growth from the Meta deal, and if that materializes, the valuation is justified. Compared to its own history, the stock trades at a slight premium, but the growth prospects support the multiple. Overall, it's fairly valued to slightly undervalued based on growth-adjusted metrics.
Entergy is a good buy for investors with a moderate risk tolerance, given its 18.1% upside to the average analyst target of $123.53 and a PEG ratio of 0.38, indicating undervaluation. The stock offers a 2.67% dividend yield and defensive beta of 0.486, providing downside support. However, the high debt-to-equity ratio of 1.80 and negative free cash flow of -$3.0B TTM introduce financial risk. If you believe in the Meta-driven growth story and can tolerate volatility, it's a compelling buy; otherwise, consider waiting for a better entry point.
Entergy is best suited for long-term investment, given its regulated utility business and multi-year growth initiatives like the Meta deal. The stock's beta of 0.486 indicates lower volatility than the market, making it a defensive holding. The dividend yield of 2.67% provides income while waiting for growth to materialize. Short-term trading is possible but risky due to recent price volatility and execution uncertainties. A minimum holding period of 3-5 years is recommended to fully capture the benefits of the grid expansion and earnings growth.