ENTERGY CORP /DE/ (ETR): what the price requires
At today's price, ENTERGY CORP /DE/ (ETR) is priced for -1.5% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ETR
Headline
| Field | Value |
|---|---|
| Ticker | ETR |
| Company | ENTERGY CORP /DE/ |
| Current price | $115.15/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 24.5% |
| Implied growth | -1.5% |
| Multiple paid | 26x operating income |
Solve inputs: computed at a 6.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~9.9pp.
Reconcile: at the x-ray's 9.3% required return this reads ~24.8%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.14σ |
| cohort percentile (of 70 peers) | 76 |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.67x | 5 | expensive |
| Earnings | 1.91x | 3 | expensive |
| Relative | 1.34x | 5 | expensive |
| Growth | 0.96x | 2 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.0%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $160.06 | 0.72x | yes | Exit EV/EBITDA: 13.5x / 15.5x / 17.5x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $104.62 | 1.10x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.4x / 20.0x / 23.6x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $59.91 | 1.92x | yes | BV/sh $37.70, ROE (TTM) 14.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $74.66 | 1.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $96.44 | 1.19x | yes | Rev $13.3B, growth 11% (input: historical growth; tapered), Terminal P/S: 3.3x / 4.0x / 4.7x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $66.92 | 1.72x | yes | EPS $5.58, growth 2% (input: historical EPS growth), PEG=10.39 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $7.84 | 14.69x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.54B × (1−18%) / WACC 6.0% → EPV (no growth) |
| Residual Income | Asset | $76.77 | 1.50x | yes | BV $37.70 + 5yr PV of (ROE (TTM) 14.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $68.78 | 1.67x | yes | √(22.5 × EPS $5.58 × BVPS $37.70) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $85.84 | 1.34x | yes | EBITDA $5.41B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $179.93 | 0.64x | yes | EPS $5.58 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.10 | 18.88x | yes | BV $37.70 × (ROIC 1.0% / WACC 6.0%) |
| P/Sales Sector | Relative | $71.82 | 1.60x | yes | Revenue $13.29B × sector P/S 2.5x |
| PEG Fair Value | Relative | $209.12 | 0.55x | yes | EPS $5.58 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $60.29 | 1.91x | yes | EPS $5.58 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $30.6b |
| Net debt / NOPAT (after-tax) | 11.61x |
| Net debt / operating income (pre-tax) | 9.48x |
| Interest coverage | 2.2x |
| Share count CAGR (dilution) | 3.2% |
| Burning cash | no |
Bullet Takeaways
- Entergy is a regulated electric utility across the Gulf South whose rates are set in regulatory proceedings before bodies the filing names as "the APSC, the LPSC, the MPSC, the City Council, and the PUCT", and the story now turning is a wave of large-customer load growth, with the capital plan including "significant investments in generation facilities to serve the rapid growth in load demand from large customers".
- The biggest specific risk is the price itself: at about 25 times company-wide operating income, the multiple sits at the very top of the utility peer distribution, well beyond the upper quartile, with no valuation family reaching the price.
- What moves the stock next is the data center pipeline: a hyperscale agreement with Meta in northeast Louisiana added roughly $14 billion to the capital plan and lifted the retail sales outlook to about 8.5% compound annual growth through 2029.
Bull Case
What the standard models miss about Entergy is that a regulated utility earns on the assets it builds, and Entergy is about to build a great deal more. A utility's profit is its allowed return applied to its rate base, so the variable that matters is not this year's margin but how fast the invested base grows. The filing is explicit that the "capital plan of certain Utility operating companies includes significant investments in generation facilities to serve the rapid growth in load demand from large customers and large-", which is the rate base expanding to meet demand it does not have to create. The single biggest piece is a hyperscale agreement with Meta in northeast Louisiana that added roughly $14 billion to the capital plan and pushed the retail sales outlook to about 8.5% compound annual growth through 2029, with industrial sales growing around 16%.
This is the rare moment when a utility's growth is demand-led rather than rate-case-led. The regulatory machinery that normally caps a utility's pace, where "the rates charged to their customers are determined in regulatory proceedings", here works in Entergy's favor: large new loads spread fixed costs across more kilowatt-hours, and the Meta arrangement is structured to deliver roughly $2 billion in savings to existing customers over 20 years, which is the kind of alignment that makes regulators say yes. Behind Meta sits a pipeline the company describes as 7 to 12 gigawatts of potential data center customers, so the $14 billion may be the first installment rather than the whole story.
The earnings cadence already reflects the turn. Adjusted earnings per share rose to $0.86 in the first quarter of 2026 from $0.82 a year earlier, the company reaffirmed full-year adjusted EPS guidance of $4.25 to $4.45, and it carries a 2029 adjusted EPS outlook of $6.40. A utility growing earnings per share toward the high single digits, funded by load it is being asked to serve, is a different animal from the slow-compounding income stock the sector usually offers.
Bear Case
Read the methods honestly and the bear case writes itself: they all disagree with the price, and they disagree in the same direction. No valuation family reaches today's level. Book value plus profitability, earnings power, peer multiples, and even the forward-growth method all land below the price, which means the market is paying for an outcome no standard frame supports. The most conservative reads are the loudest: the asset-based methods, anchored on a return on equity in the mid-teens against a higher cost of equity, place fair value well under the price, and the multiple sits at the very top of the utility peer distribution, beyond the upper quartile. When the cheap methods and the expensive methods agree the price is full, the burden of proof is entirely on the growth story arriving exactly as advertised.
The growth story carries a specific, disclosed risk: the load may not show up. Entergy's own filing warns of "a resulting risk of stranded costs if expected demand does not materialize and this risk is not mitigated through appropriate commercial terms, which are subject to negotiations with the customer". A $14 billion capital plan built around hyperscale customers is only as good as those contracts, and data center demand is concentrated in a handful of counterparties whose own plans can change. If the gigawatts arrive slower than projected, Entergy still owns the generation it built to serve them, and the cost lands somewhere, either on shareholders or on regulators' patience.
The balance sheet has little room for disappointment. Net debt sits near $30.6 billion, close to ten times operating income, with interest coverage around 2.1 times, which is heavy even by utility standards, and the company funds its capital plan partly by issuing shares, with the count growing about 3.2% a year. That dilution is the quiet cost of the growth: a holder's slice of the larger rate base keeps getting cut to pay for building it. Regulatory returns are the ceiling, too. The filing references an authorized return on common equity of 8.33% in one proceeding "return on common equity of 8.33 %, requiring an approximately $ 70.7 million increase to base rider revenue", a reminder that a regulated utility cannot simply keep the upside; the allowed return is set by the same commissions that approve the spending.
Valuation
Begin with the disagreement, because it is unusually clean. Every valuation family lands below today's price. The asset-based methods, built on book value and a mid-teens return on equity, sit furthest below; earnings power and peer multiples are also short; and even the forward-growth method does not reach it. The inversion captures the oddity precisely: at about 25 times company-wide operating income, the multiple sits at the very top of the utility peer distribution, well beyond the upper quartile. In plain terms, the price is not defended by what Entergy owns, what it earns, or what comparable utilities fetch. It is a bet on the growth the company has guided to, priced as if that growth is already in the rate base.
The peer frame sharpens the point. Entergy trades alongside utilities such as Xcel, Ameren, Sempra, and Evergy, and its multiple sits at the rich end of that cohort, which is the market awarding a premium for the load-growth pipeline that the others, for the most part, do not have at the same scale. That premium is the entire valuation argument: strip out the conviction that the data center demand converts into rate base at the guided pace, and the static methods say the stock is expensive.
Solvency is where a utility's bet is bounded, and Entergy's is leveraged. Net debt near $30.6 billion at roughly ten times operating income, with coverage around 2.1 times, is the structure that funds the capital plan, and the equity issuance that grows the share count about 3.2% a year is the other half of that funding. The company is not burning cash, and regulated cash flows are dependable, but the combination of a top-of-cohort multiple and a balance sheet stretched to build into projected demand is the trade a buyer accepts: the growth has to materialize roughly on schedule, because the price has already paid for it.
Catalysts
The first quarter of 2026 was defined less by the earnings line than by the deal behind it. Entergy reported adjusted earnings per share of $0.86, up from $0.82 a year earlier, and reaffirmed full-year 2026 adjusted EPS guidance of $4.25 to $4.45, alongside a 2029 adjusted EPS outlook of $6.40. The headline was the hyperscale agreement with Meta to power a large data center project in northeast Louisiana, which added roughly $14 billion to the capital plan, lifted the retail sales outlook to about 8.5% compound annual growth through 2029 on roughly 16% industrial growth, and is structured to save existing customers about $2 billion over 20 years. Management framed Meta as the leading edge of a 7 to 12 gigawatt data center pipeline.
Analyst opinion is constructive but not uniformly so, which fits a stock priced for the growth to arrive. The consensus rating is Buy with an average target near $121.88, above the current price. Evercore ISI upgraded the shares to Outperform with a target of $121, up from $115, while BMO Capital trimmed its target to $123 from $127 but kept an Outperform rating. The next catalysts are regulatory and contractual: approvals for the expanded capital plan and additional large-customer agreements would validate the pipeline, while any slippage in the data center timeline is the development that would test a price the standard methods already call full.
Peer Cohorts (Per Segment, With Filing Citations)
Utility (reported)
- NEE (NextEra Energy Inc)
- (no filing in the citation store)
- DUK (DUKE ENERGY CORPORATION)
- (no filing in the citation store)
- SO (SOUTHERN CO)
- (no filing in the citation store)
- AEP (AMERICAN ELECTRIC POWER CO INC.)
- (no filing in the citation store)
- D (DOMINION ENERGY, INC)
- (no filing in the citation store)
- EXC (EXELON CORPORATION)
- (no filing in the citation store)
- XEL (XCEL ENERGY INC)
- (no filing in the citation store)
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.
- 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.
Sources
Q1 2026 results, April 2026 · analyst notes, 2026