Entergy (ETR) Valuation Check As New 1 GW Gas-Fired Capacity Plan Targets Southeast Texas Growth

Entergy (ETR) is back in focus after the utility asked for proposals for up to 1 GW of new gas fired generation in Southeast Texas, tying directly into its long term Southeast Texas Energy Plan.

See our latest analysis for Entergy.

That request for up to 1 GW of new gas fired capacity comes after a period where Entergy’s share price return has been firming, with a 12.9% 30 day move and a 26.5% one year total shareholder return, suggesting investors are weighing both growth plans and recent earnings, including the fourth quarter 2025 update and the refreshed at the market equity program.

If this utility build out has you thinking about long term infrastructure themes, it could be a good moment to look at 24 power grid technology and infrastructure stocks for more potential grid focused ideas beyond Entergy.

With Entergy trading at $105.20 and sitting only about 2% below the average analyst price target, yet carrying an implied intrinsic discount of roughly 78%, you have to ask whether there is still real value here or whether the market is already baking in future growth.

Most Popular Narrative: 1.4% Undervalued

At a last close of $105.20 against a narrative fair value of $106.65, Entergy’s valuation case hinges heavily on how you see long term demand and regulation playing out.

Substantial long term electricity demand growth is expected from industrial development, population migration to the Gulf South, and large scale data center expansions in Entergy's service territory, potentially driving load growth and higher regulated revenues.

Capital investment of $40 billion over four years (with an expanded pipeline for renewables, grid modernization, and resilience upgrades) is expected to grow the company's rate base and support EPS and earnings growth over that period.

Read the complete narrative.

This raises questions about what sits behind that capital plan and demand story. The narrative relies on a specific growth glide path for revenue, margins and future earnings multiples.

Result: Fair Value of $106.65 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story can change quickly if regulatory support softens or extreme Gulf Coast weather hits harder than expected, which could pressure returns and that ambitious capital plan.

Find out about the key risks to this Entergy narrative.

Another Take: Multiples Point To A Full Price

That 1.4% “undervalued” gap on the narrative fair value sits awkwardly next to the current P/E of 27.1x. This is slightly higher than both peers at 27x and the US Electric Utilities average at 22.5x. If the fair ratio of 26x is where the market eventually settles, how much room is really left?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of optimism and concern feels finely balanced, it is worth looking through the details yourself and forming a view quickly by using 3 key rewards and 3 important warning signs.

Looking for more investment ideas?

If Entergy has sharpened your focus on utilities and infrastructure, do not stop here. Broaden your watchlist with a few hand picked ideas before the crowd does.

• Spot potential bargains early by checking out 51 high quality undervalued stocks that pair solid fundamentals with price tags that may not fully reflect their profiles.
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• Sleep a little easier by scanning 78 resilient stocks with low risk scores that concentrate on businesses with more resilient risk profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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