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On Thursday, Ladenburg Thalmann analyst Paul Fremont upgraded shares of Entergy Corp (NYSE:ETR) from Neutral to Buy, setting a price target of $86.50. Fremont’s decision comes as a response to the stock’s recent decline amid broader market pressures from the Deepseek sell-off. According to InvestingPro data, three analysts have recently revised their earnings upward for the upcoming period, with analyst targets ranging from $65 to $90.
Entergy, which operates in the utility sector with a market capitalization of $34 billion, is recognized for its robust projected earnings per share (EPS) growth. Fremont highlighted that the company is expected to achieve an EPS growth rate of 9.0% through 2028, according to Ladenburg’s revised estimates. This growth rate is at the upper end of Entergy’s own target range of 8%-9% and currently stands as the highest growth target within its sector. The company has demonstrated consistent shareholder returns, having maintained dividend payments for 37 consecutive years.
Fremont stated in his comments that the stock’s valuation has become more attractive following the recent pullback. He noted that Entergy’s stock is trading at a 14% price-to-earnings (P/E) premium compared to its peers, with InvestingPro showing a current P/E ratio of 19.37x. Despite this premium, Fremont believes there is potential for the premium to expand further, indicating a positive outlook for the stock’s future performance. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels.
Entergy’s strong growth prospects are a key factor in Fremont’s upgraded rating. The company’s targeted growth rate, which is at the high end of its sector, provides a compelling case for the stock’s attractiveness to investors seeking growth within the utility industry.
The upgrade to a Buy rating suggests that Ladenburg Thalmann sees Entergy’s stock as a favorable investment opportunity, especially in light of the recent market downturn that has affected many stocks, including Entergy. Fremont’s price target of $86.50 reflects his confidence in the stock’s ability to recover and build upon its current P/E premium.
In other recent news, Entergy Corporation has agreed to pay a $12 million civil penalty to settle charges by the Securities and Exchange Commission (SEC) that it failed to maintain internal accounting controls. The Louisiana-based utility company has also announced a two-for-one forward stock split and an increase in authorized common shares from 499 million to 998 million. These are among the recent developments in the company’s operations.
Entergy has also made amendments to its bylaws, aiming to align with recent developments in Delaware law and current best practices. The changes are designed to clarify and, in some instances, lessen the disclosure obligations of nominating and proposing shareholders. The company has also been highlighted by RBC Capital Markets as one of the stocks offering exposure to the burgeoning data center markets.
Several analyst firms have adjusted their ratings and price targets for Entergy. KeyBanc Capital Markets downgraded the company’s stock from Overweight to Sector Weight due to valuation concerns. In contrast, BMO Capital maintained an Outperform rating on the stock, despite reducing its price target to $159 from $166. Meanwhile, BofA Securities moved its rating to Neutral from Buy but increased the price target from $138 to $154.
The company reported a strong third-quarter earnings performance with an adjusted earnings per share (EPS) of $2.99, leading to an upward revision of the lower end of its guidance range. Entergy also revealed plans to accelerate its capital investment plan, allocating an additional $7 billion toward renewable energy and transmission projects. The company’s revised business plan includes a 21% increase in capital spending, higher EPS guidance, and an elevated EPS growth rate of 8%-9% from 2026 to 2028.
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