Barclays analysts upgraded Entergy (NYSE:ETR) to Overweight from Equalweight, raising their price target on the stock to $138 from $115.
The upgrade is driven by a combination of favorable regulatory developments and improved storm resilience efforts by the company. Entergy recently reached key settlements, including with the Louisiana Public Service Commission and the System Energy Resources, which have reduced regulatory risks. The analysts also highlighted Entergy’s strong long-term earnings growth potential, with a projected 6-8% compound annual growth rate (CAGR), making it undervalued compared to other vertically integrated utilities like Southern Company, Duke Energy, and American Electric Power.
In addition to regulatory improvements, the analysts noted that Entergy is demonstrating the effectiveness of its resiliency investments, particularly with successful recovery efforts following Hurricane Francine. This focus on storm resilience, coupled with industrial growth and well-managed rate risks across its operating companies, positions Entergy for further growth. The analysts believe that Entergy’s current 5% discount compared to its large-cap electric utility peers could shift toward a premium as the company continues to strengthen its balance sheet and execute on its growth strategies heading into 2025.