ENTERGY CORP /DE/ (ETR): what the price assumes

In the published model solve dated 2026-Q2, anchored at $105.75, ENTERGY CORP /DE/ (ETR) is priced for -3.6% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/ETR

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: elevated (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.8%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Seven new combined-cycle gas units are going up across two Louisiana sites, and the 10-Q is specific about why: "Four of the new combined cycle combustion turbine generation resources are to be located near the customer site in north Louisiana (Richland Parish Units 1-4), while the remaining three units will be located near the existing Big Cajun site in Pointe Coupee Parish (Pointe Coupee Units 1-3)."
• Building that costs money the company does not have on hand, so it is issuing stock: the basic average share count went from 430.3 million in the March 2025 quarter to 455.7 million a year later, which divides the same regulated return across more owners.
• Second-quarter results land on July 29, 2026, and the Louisiana regulator's review of the electric service agreement behind the north Louisiana plants is the decision with the most leverage on the construction schedule.

Bull Case

Very little of the cash here comes back to shareholders. A dividend yielding about 2.2% goes out, and the rest goes into the ground. For most companies that would be a warning about capital discipline. For a regulated utility it is the entire mechanism. XEL's own 10-K states the arrangement plainly: "Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in assets required to deliver services to customers." Money spent on approved plant becomes an asset the regulator lets the company earn on. Spending is how earnings grow. A buyback would be an admission there was nowhere useful left to put the money.

Entergy's capital plan has two layers. The first is ordinary: "The capital plan includes amounts Entergy plans to spend on routine capital projects that are necessary to support reliability of its service, equipment, or systems and to support normal customer growth." The second is not ordinary at all. Seven combined-cycle turbines are being built across Richland Parish and Pointe Coupee Parish in Louisiana, four of them sited next to a single very large customer. A utility does not usually build generation for one buyer. It builds for a service territory and lets demand average out.

The terms are what make the second layer interesting rather than reckless. Under guidelines the Louisiana commission developed in response to data-center investment in the state, the 10-Q says "The protections include terms requiring the customer to pay Entergy Louisiana's incremental costs to serve the customer", including through contributions in aid of construction. Translated: the customer puts money in before the concrete is poured. The risk of building capacity for demand that never arrives is pushed back toward the party asking for the capacity, which is precisely the term a shareholder would negotiate if they were in the room.

Arkansas offers a smaller version of the same story. In its January 2026 order the state commission approved Entergy Arkansas's recovery of the costs of constructing Jefferson Power Station through the Generating Arkansas Jobs Act rider. Riders matter more than they sound like they should. A rider shortens the delay between writing the cheque and collecting on it, and in a business where the return is fixed by formula, the timing of collection is most of what separates a good regulatory outcome from a mediocre one.

Underneath all of this sits a business that already converts about 24.5% of revenue into operating profit. That is squarely in the peer band rather than at either edge of it: SO runs 24.2% and AEP 24.2% on the same basis, XEL runs 18.0%, while DUK at 27.2% and NEE at 29.5% sit above. Entergy is also the smallest of that group by revenue, and the industrial share of its revenue mix, at 28%, is unusually heavy for a US electric utility. A territory that already sells more than a quarter of its power to industrial users is a territory where an enormous new industrial load is a difference of degree rather than of kind.

Bear Case

The other side of all that new plant is the borrowing that pays for it. Operating profit covers interest expense a little over 2.2 times, which for a regulated utility is normal rather than alarming, and that is exactly the problem with reading it. The sector runs on borrowed money because regulators permit it, and the arrangement holds only while two conditions stay true: rates keep rising to cover the cost of the plant, and the cost of new borrowing does not run ahead of what the rate case allows. Neither condition is under the company's control.

The equity side is doing work too. Basic average shares outstanding went from 430.3 million in the first quarter of 2025 to 455.7 million in the first quarter of 2026, a rise of roughly 6% in twelve months, and the count has compounded up about 3.2% a year since early 2022. Each new share is a claim on the same allowed return. A holder who does nothing is quietly funding the build.

Then there is weather. Entergy's territory runs along the Gulf Coast, and the 10-K risk section does not soften the exposure: "The inability to recover losses either excluded by insurance or in excess of the insurance limits that can be secured economically also could have a material effect on Entergy and its Utility operating companies." A single bad storm season is a cash-flow event first and a regulatory negotiation second, and the negotiation takes years.

Regulatory lag is visible in the filings without needing a hurricane to trigger it. Entergy Arkansas's earned rate of return on common equity for the 2026 projected year came in at 8.45%, producing a revenue deficiency of 68.9 million dollars that the formula rate plan then has to close. That gap is what it looks like when a utility spends ahead of the rates that pay for the spending.

Which brings the data-center build back around. The bull reads the customer protections as risk transferred away. The 10-K reads the same arrangement from the other end, naming "a resulting risk of stranded costs if expected demand does not materialize" and noting that the mitigation depends on commercial terms still subject to negotiation. Seven combined-cycle turbines are a thirty-year asset built against a customer commitment that is shorter than that, in an industry whose compute demand nobody has forecast accurately for three consecutive years.

The valuation is where these threads meet. The price pays about 26 times trailing operating income, and that multiple sits at the very top of the utility peer distribution, well beyond its upper quartile. Not one family of valuation method reaches today's level. If the build lands on schedule and the customer honours the contract, that premium is defensible. If the multiple simply drifts back toward where the rest of the cohort trades, the price falls whether or not a single turbine is late.

Valuation

Today's price pays about 26 times the company's trailing operating income. Measured against the other large regulated utilities in the cohort, that lands at the very top of the distribution, well beyond the upper quartile. Paying the highest multiple in a group whose earnings are set by state commissions rather than by markets is a specific bet: that this utility's spending gets approved more reliably, or grows faster, than everyone else's.

The methods used to triangulate a value do not currently reach that level. Not one family gets there. The nearest approach comes from the cash-flow method that holds today's enterprise-value-to-EBITDA ratio flat all the way out to its terminal year, which is another way of saying it gets close by assuming the market's present opinion is already correct. Applying the utility-sector enterprise-value-to-EBITDA reference of roughly 13 to trailing EBITDA of 5.41 billion dollars lands well under. So does the book-value-and-returns family, which values the equity off reported book value per share and the return the company earns on it. Taken together, the forward-growth methods sit about 41% under where the stock trades.

Run the arithmetic backwards and it looks far easier, which is worth explaining rather than hiding. Inverted, the current level implies company-wide operating growth of about -1.4% a year, sustained over a five-year stage. That is not a demanding requirement. It is also not the same calculation as the ones above: the backward read credits a terminal value compounding at 4% a year indefinitely, discounted at a cost of capital only modestly above that figure, and that narrow gap does most of the work. Widen it by a single point and the required growth rate moves by close to ten points. The static methods assume no such perpetuity, which is why they land where they do. Treat the backward reading as approximate and directional.

Scale is part of the picture. Entergy turns over about 13.3 billion dollars of revenue, the smallest in its cohort: XEL runs 14.8 billion, AEP 22.3 billion, EXC 24.8 billion, NEE 27.9 billion, SO 30.2 billion and DUK 33.2 billion. The revenue mix is ordinary for the sector, 37% residential and 24% commercial, with the industrial 28% doing the differentiating.

The balance sheet is what has to carry the construction programme. Net debt runs about 9.5 times operating profit. That is a heavy figure in absolute terms and an unremarkable one for a regulated utility, where the borrowing is matched against a rate base the commission has agreed to let the company earn on. The vulnerability is not the level, it is the refinancing: a business carrying that much and issuing shares every quarter to fund more plant is a business whose returns depend on the terms of its next raise as much as on the operations of its existing plants.

Catalysts

Second-quarter results are scheduled for July 29, 2026. The March quarter set up the question the print has to answer. Operating income ran below the same quarter a year earlier while consolidated net income rose, carried by a larger allowance for equity funds used during construction, an accounting credit that accrues on capital tied up in unfinished plants, and by a lighter tax charge: the effective income tax rate was 18.3% for the first quarter of 2026 against 21.6% a year earlier. Both are real, both are disclosed, and neither is the operating business earning more money.

Broker positioning has moved in the last several weeks and it has not moved in one direction. Morgan Stanley lifted its target to 109 dollars from 103 while keeping an Equal Weight rating. BMO Capital nudged its own to 124 dollars from 123 on an Outperform rating. Evercore ISI upgraded the stock to Outperform from In Line about six weeks ago, moving to 121 dollars. The three land on either side of where the shares trade, which is a reasonable summary of a name whose thesis turns on a regulatory calendar.

Two dated items sit further out. Entergy and Mitsubishi Heavy Industries outlined a collaborative partnership in mid-July under a signed memorandum of understanding, which is a statement of intent rather than a contract and should be read as one. More consequentially, the Louisiana commission's review of the electric service agreement behind the north Louisiana generation is still working through its administrative hearings process, with the hearing officer compiling a record for the commission to consider. That proceeding, not the quarterly print, is what determines whether the largest piece of the capital plan proceeds on the timetable the company has laid out.

Peer Cohorts (Per Segment, With Filing Citations)

Utility (reported)

• NEE (NextEra Energy Inc)
• FY2025 10-K: …iso4217:USD xbrli:shares nee:agreement nee:county xbrli:pure utr:kWh utr:MW nee:unit nee:facility utr:Btu utr:MWh utr:MMBTU utr:bbl nee:customer nee:state nee:investment utr:mi nee:variable_interest_entity utr:Rate nee:segment 0000753308 2025-01-01 2025-12-31 0000753308 nee:FloridaPowerLightCompanyMember 2025-01-01…
• FY2025 10-K: …s FPL FPL is a rate-regulated electric utility engaged primarily in the generation, storage, transmission, distribution and sale of electric energy in Florida. FPL is the largest electric utility in Florida and the U.S. As of December 31, 2025, FPL had 35,963 MW of net generating capacity, approximately 93,000…
• DUK (DUKE ENERGY CORPORATION)
• FY2025 10-K: …duk:ResidentialMember duk:DukeEnergyCarolinasMember duk:ElectricUtilitiesandInfrastructureMember 2024-01-01 2024-12-31 0001326160 us-gaap:ElectricityUsRegulatedMember duk:ResidentialMember duk:ProgressEnergyMember duk:ElectricUtilitiesandInfrastructureMember 2024-01-01 2024-12-31 0001326160…
• FY2025 10-K: ElectricityUsRegulatedMember duk:CommercialMember duk:ProgressEnergyMember duk:ElectricUtilitiesandInfrastructureMember 2025-01-01 2025-12-31 0001326160 us-gaap:ElectricityUsRegulatedMember duk:CommercialMember duk:DukeEnergyProgressMember duk:ElectricUtilitiesandInfrastructureMember 2025-01-01 2025-12-31 0001326160…
• SO (SOUTHERN CO)
• FY2025 10-K: CompanyGasMember 2023-01-01 2023-12-31 0000092122 so:SouthernCompanyServicesIncMember us-gaap:ElectricTransmissionMember so:SouthernPowerMember 2025-01-01 2025-12-31 0000092122 so:SouthernCompanyServicesIncMember us-gaap:ElectricTransmissionMember so:SouthernPowerMember 2024-01-01 2024-12-31 0000092122…
• FY2025 10-K: …us-gaap:FairValueInputsLevel1Member so:GeorgiaPowerMember 2024-12-31 0000092122 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member so:GeorgiaPowerMember 2024-12-31 0000092122 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member so:GeorgiaPowerMember 2024-12-31 0000092122…
• AEP (AMERICAN ELECTRIC POWER CO INC.)
• FY2025 10-K: …aep:AEPTexasInc.Member us-gaap:RelatedPartyMember 2024-12-31 0000004904 aep:AEPTransmissionCompanyLLCMember aep:UtilityMember 2024-01-01 2024-12-31 0000004904 aep:UtilityMember aep:AEPTransmissionCompanyLLCMember us-gaap:RelatedPartyMember 2024-12-31 0000004904 aep:AppalachianPowerCompanyMember aep:UtilityMember…
• FY2025 10-K: …aep:PublicUtilitiesPropertyPlantAndEquipmentPlantInServiceMember 2025-12-31 0000004904 aep:AppalachianPowerCompanyMember aep:PublicUtilitiesPropertyPlantAndEquipmentPlantInServiceMember 2025-12-31 0000004904 aep:IndianaMichiganPowerCompanyMember aep:PublicUtilitiesPropertyPlantAndEquipmentPlantInServiceMember…
• D (DOMINION ENERGY, INC)
• FY2025 10-K: …riders; • A $173 million increase in sales to electric utility retail customers, primarily due to an increase in cooling degree days during the cooling season ($107 million) and an increase in heating degree days during the heating season ($66 million); • A $155 million increase in sales to electric utility retail…
• FY2025 10-K: …d:CommercialMember 2025-01-01 2025-12-31 0000715957 us-gaap:NondesignatedMember 2024-01-01 2024-12-31 0000715957 us-gaap:PensionPlansDefinedBenefitMember d:VirginiaElectricAndPowerCompanyMember d:OtherOperationsAndMaintenanceExpenseMember 2024-01-01 2024-12-31 0000715957 us-gaap:PensionPlansDefinedBenefitMember…
• EXC (EXELON CORPORATION)
• FY2025 10-K: …their financial commitments, ensuring timely recovery on investments to enable customer benefits, supporting clean energy policies including those that advance our jurisdictions' clean energy targets, and continued commitment to corporate responsibility. Exelon's strategy is to improve reliability and operations,…
• FY2025 10-K: Registrants) and natural gas and gas distribution services (PECO, BGE, and DPL) to residential, commercial, industrial, and governmental customers through regulated tariff rates approved by state regulatory commissions. Delivery of electricity and/or natural gas. Over time (each day) as the electricity and/or natural…
• XEL (XCEL ENERGY INC)
• FY2025 10-K: …transmits, distributes and sells electricity. NSP-Minnesota and NSP-Wisconsin electric operations are managed on the NSP System. NSP-Wisconsin also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas. Natural gas customers 0.1 million Total assets…
• FY2025 10-K: …natural gas customers through four utility subsidiaries (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS). Along with the utility subsidiaries, the transmission-only subsidiaries, WYCO (a joint venture formed with CIG to develop and lease natural gas pipelines and storage facilities) and WGI (an interstate natural gas…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.