Entergy Stock: Is ETR Outperforming the Utilities Sector?

Entergy Corporation (ETR), headquartered in New Orleans, Louisiana, produces and retails distribution of electricity. Valued at $36.5 billion by market cap, the company delivers electricity to utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy also owns and operates nuclear plants in the southern U.S.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and ETR perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the utilities - regulated electric industry. ETR's strength lies in its regulated utility model, providing a stable revenue stream despite market challenges. The company's resilience in operating revenues reflects its robust business model and ability to maintain a steady customer base. Its focus on capital and operational efficiency, evidenced by increased plant service additions, ensures continued investment in infrastructure while maintaining financial stability.

Despite its notable strength, ETR slipped 4.2% from its 52-week high of $88.38, achieved on Feb. 18. Over the past three months, ETR stock has gained 12.7%, outperforming the Utilities Select Sector SPDR Fund’s (XLU) 3.7% gains during the same time frame.

In the longer term, shares of ETR rose 11.6% on a YTD basis and climbed 64.3% over the past 52 weeks, outperforming XLU’s YTD gains of 4.7% and 24.1% returns over the last year.

To confirm the bullish trend, ETR has been trading above its 50-day and 200-day moving averages over the past year, experiencing some fluctuations. 

ETR’s outperformance is driven by higher revenues from its electric utility segment.

On Feb. 18, ETR shares closed up by 6% after reporting its Q4 results. Its adjusted EPS of $0.66 topped Wall Street expectations of $0.63. The company’s revenue was $2.7 billion, falling short of Wall Street forecasts of $3 billion. ETR expects full-year adjusted EPS in the range of $3.75 to $3.95. 

In the competitive arena of utilities - regulated electric, DTE Energy Company (DTE) has taken the lead over ETR, showing resilience with a 13.4% gain on a YTD basis but lagged behind the stock with a 24.5% uptick over the past 52 weeks. 

Wall Street analysts are moderately bullish on ETR’s prospects. The stock has a consensus “Moderate Buy” rating from the 18 analysts covering it, and the mean price target of $88.28 suggests a potential upside of 4.3% from current price levels.