Entergy Corporation: Powering Through Market Challenges
Stock Performance Exceeds Market Expectations
Valued at a market cap of $32.3 billion, Entergy Corporation (ETR) stands out as a major energy player, providing electricity across Arkansas, Louisiana, Mississippi, and Texas. The company has built a diverse generation fleet that operates within regulated utilities and wholesale energy markets, supporting millions of customers with various power sources.
Impressive Returns Outshining the S&P 500
Over the past 52 weeks, Entergy’s stock has demonstrated remarkable growth. ETR shares have risen by 52.3%, significantly outperforming the broader S&P 500 Index ($SPX), which saw a 30.1% increase. In 2024 alone, shares of ETR have increased by 48.9%, compared to SPX’s YTD gain of 24.1%.
Delving deeper, the utility company has outpaced the Utilities Select Sector SPDR Fund’s (XLU) 29.6% return over the same 52-week period and a 27.1% YTD gain.
Strong Earnings Amid Challenges
Despite reporting Q3 revenues of $3.4 billion below expectations, Entergy saw its shares rise by 15.2% on Oct. 31. This spike was driven by an adjusted profit of $2.99 per share, exceeding analyst predictions. Factors such as lower costs and increased service rates helped mitigate the adverse effects caused by Hurricane Francine. Furthermore, Entergy’s projected full-year profit of $7.15 to $7.35 per share has also surpassed analyst expectations, showcasing the company’s resilience.
Looking ahead to the current fiscal year, analysts forecast that ETR’s EPS will grow by 6.5% year-over-year to $7.21. Over the last four quarters, Entergy has had a mixed record regarding earnings surprises, beating consensus estimates twice while falling short on two occasions.
Analyst Sentiment Improving
Among the 18 analysts following the stock, the consensus rating stands as a “Moderate Buy.” This rating includes 11 “Strong Buy” designations, 1 “Moderate Buy,” and 6 “Hold” recommendations.
This outlook shows a slight improvement compared to three months ago, during which there were only 10 “Strong Buy” ratings.
Positive Outlook from Analysts
On Nov. 5, Barclays analyst Nicholas Campanella raised the price target for Entergy to $152 while reaffirming an “Overweight” rating. Currently, ETR is trading above the average price target of $148.64, with the highest target of $170 suggesting a potential upside of 12.8%.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
