Stock Analysis & Valuation Entergy Corporation (ETY.DE)

• Previous Close: €80.50
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	10.60	-87
Graham Formula	12.80	-84

Strategic Investment Analysis

Company Overview

Entergy Corporation (ETY.DE) is a leading U.S.-based energy company specializing in electricity production and retail distribution. Headquartered in New Orleans, Louisiana, Entergy operates through two key segments: Utility and Entergy Wholesale Commodities. The Utility segment serves approximately 3 million customers across Arkansas, Louisiana, Mississippi, and Texas, providing electricity and natural gas through a diversified generation mix that includes gas, nuclear, coal, hydro, and solar power. The Wholesale Commodities segment focuses on nuclear and non-nuclear power generation, selling electricity to wholesale markets and offering services to other nuclear plant operators. With a generating capacity of 26,000 MW—including 6,000 MW from nuclear—Entergy plays a critical role in the U.S. regulated electric utilities sector. The company’s vertically integrated model ensures stable revenue streams while supporting the transition to cleaner energy sources. As a key player in the Gulf Coast region, Entergy is strategically positioned to benefit from growing energy demand and infrastructure investments.

Investment Summary

Entergy Corporation presents a stable investment opportunity within the low-beta utilities sector, supported by its regulated revenue streams and diversified energy portfolio. The company’s strong operating cash flow (€4.49B) and focus on nuclear energy provide a competitive edge, though high total debt (€29.3B) and significant capital expenditures (€5.84B) pose financial risks. Entergy’s lack of dividends may deter income-focused investors, but its essential service model and regional monopoly characteristics offer resilience against economic downturns. The stock’s low beta (0.721) suggests lower volatility compared to the broader market, appealing to conservative investors. However, exposure to regulatory changes and decarbonization pressures could impact long-term profitability.

Competitive Analysis

Entergy’s competitive advantage lies in its vertically integrated utility model and dominance in the Gulf Coast region, where it operates as a regulated monopoly with predictable cash flows. Its nuclear fleet (6,000 MW) provides cost-efficient, low-carbon baseload power, differentiating it from peers reliant on fossil fuels. The company’s scale and infrastructure investments (e.g., grid modernization, renewable integration) strengthen its market position. However, Entergy faces competition from larger national utilities with greater financial flexibility and broader renewable portfolios. Regulatory risks are heightened given its concentration in states with evolving energy policies. While its wholesale segment adds diversification, it exposes Entergy to volatile merchant power markets. The company’s focus on rate-base growth and customer reliability supports its defensive profile, but slower renewable adoption compared to peers like NextEra Energy could limit long-term growth in a decarbonizing economy.

Major Competitors

• NextEra Energy (NEE): NextEra Energy is a leader in renewable energy (wind/solar) and operates the largest regulated utility in Florida (FPL). Its aggressive renewable investments and lower carbon footprint contrast with Entergy’s reliance on nuclear and gas. NextEra’s scale and growth trajectory (supported by its Energy Resources segment) make it a more dynamic competitor, though Entergy’s regional focus provides localized stability.
• Southern Company (SO): Southern Company operates in the Southeast U.S. with a similar regulated utility model and nuclear assets (e.g., Vogtle Plant). Its larger customer base and recent renewable investments pose competition, but Entergy’s lower regulatory risk (no multi-state complexity) and stronger cash flow margins offer relative advantages.
• Duke Energy (DUK): Duke Energy’s multi-state footprint and significant renewable pipeline (16 GW by 2030) overshadow Entergy’s regional focus. Duke’s higher dividend yield may attract income investors, but Entergy’s lower debt-to-equity ratio and concentrated service territory provide operational efficiency.
• Exelon Corporation (EXC): Exelon, the largest U.S. nuclear operator, competes directly in wholesale markets. Its pure-play regulated utility spin-off (Constellation) contrasts with Entergy’s integrated model. Exelon’s larger nuclear fleet and urban customer base (e.g., Chicago, Philadelphia) offer scale, but Entergy’s Gulf Coast focus reduces weather-related risks.