## Entergy (ETR) Earnings Preview: What to Watch for on October 31st
Investors are gearing up for Entergy Corporation’s (ETR) upcoming quarterly earnings release, scheduled for Thursday, October 31st, 2024. While analysts are expecting an earnings per share (EPS) of $3.09, investors are hoping for news of exceeding estimates and positive guidance for the coming quarters. Remember, stock prices are often influenced by future projections, not just past performance, so keep an eye on the company’s outlook.
Looking Back at Past Earnings:
Entergy has consistently surpassed EPS estimates in recent quarters, demonstrating a pattern of strong performance. However, the market’s response has been mixed. Here’s a breakdown of past earnings and subsequent share price changes:
| Quarter | EPS Estimate | EPS Actual | Price Change % |
|—|—|—|—|
| Q2 2024 | 1.76 | 1.92 | -0.0% |
| Q1 2024 | 1.51 | 1.08 | 1.0% |
| Q4 2023 | 0.52 | 0.52 | 1.0% |
| Q3 2023 | 2.96 | 3.27 | 1.0% |
Analyst Sentiment:
Understanding market sentiment is crucial for investors. Analysts have provided a total of 18 ratings for Entergy, with the consensus rating being ‘Outperform.’ The average one-year price target sits at $132.33, suggesting a potential 1.34% downside. While this indicates a generally positive outlook, it’s important to consider the potential for short-term volatility.
Peer Comparison:
Comparing Entergy to its peers provides valuable context for its performance. Here’s a look at the analyst ratings and average one-year price targets for Edison Intl, FirstEnergy, and PPL, three key players in the utilities sector:
*
Edison Intl:
Consensus rating ‘Neutral’, average 1-year price target of $89.0 (potential 33.65% downside).*
FirstEnergy:
Consensus rating ‘Neutral’, average 1-year price target of $46.47 (potential 65.35% downside).*
PPL:
Consensus rating ‘Outperform’, average 1-year price target of $35.43 (potential 73.59% downside).Key Takeaways from Peer Analysis:
*
Revenue Growth:
Entergy lags behind its peers in revenue growth, achieving a 3.78% increase in the last quarter, while peers like Edison Intl and FirstEnergy recorded higher growth rates.*
Gross Profit:
Similarly, Entergy’s gross profit sits at the bottom of the group, indicating a potential area for improvement.*
Return on Equity (ROE):
Entergy’s ROE also trails its peers, suggesting challenges in efficiently using equity capital to generate returns for shareholders.Delving Deeper into Entergy:
Entergy Corporation is a holding company with five regulated integrated utilities. These utilities generate and distribute electricity to approximately 3 million customers across Arkansas, Louisiana, Mississippi, and Texas. It’s one of the largest power producers in the United States, boasting 24 gigawatts of rate-regulated owned and leased power generation capacity. Prior to 2014, Entergy was the second-largest nuclear owner in the US. However, the company has been divesting its nuclear assets in the Northeast and plans to sell its smaller gas utilities in Louisiana.
Entergy’s Financial Landscape:
*
Market Capitalization:
Entergy’s market capitalization falls below industry averages, reflecting a smaller scale compared to its peers.*
Revenue Growth:
Despite the lower growth rate compared to its peers, Entergy achieved a 3.78% revenue growth over the past quarter (ending June 30, 2024), signaling a positive increase in top-line earnings.*
Net Margin:
Entergy’s net margin is below industry averages, hinting at possible challenges in profitability and cost management.*
Return on Equity (ROE):
Similar to the net margin, Entergy’s ROE is below industry averages, indicating challenges in efficiently leveraging equity capital to generate returns for shareholders.*
Return on Assets (ROA):
Entergy’s ROA also lags behind its peers, suggesting a potential need for improvement in maximizing returns from its assets.*
Debt Management:
Entergy faces a challenge in effectively managing its debt levels, as indicated by its high debt-to-equity ratio of 1.97. This can potentially strain the company’s financial health.As investors prepare for Entergy’s earnings release, understanding these key metrics, peer performance, and financial insights will provide a more informed perspective on the company’s current position and future prospects.
