A significant driver of top-line growth: Entergy Corporation (ETR)

Entergy Corporation (NYSE: ETR) stock jumped 0.64% on Friday to $113.92 against a previous-day closing price of $113.19. With 1.43 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.02 million shares. During the session, the Utilities – Diversified company that operates in wider Utilities sector, reached to the highest price of $114.67 whereas the lowest price it dropped to was $112.53. The 52-week range on ETR shows that it touched its highest point at $126.82 and its lowest point at $98.50 during that stretch. It currently has a 1-year price target of $129.22. With its current market cap of 23.15 billion, ETR has annualized dividend of $4.04 while the current yield stands at 3.55%. Beta for the stock currently stands at 0.57.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ETR was down-trending over the past week, with a drop of -1.20%, but this was down by -4.67% over a month. Three-month performance surged to 7.56% while six-month performance rose 2.77%. The stock gained 7.48% in the past year, while it has gained 1.13% so far this year. A look at the trailing 12-month EPS for ETR yields 6.04 with Next year EPS estimates of 6.75. For the next quarter, that number is 2.66. This implies an EPS growth rate of -19.70% for this year and 5.88% for next year. EPS is expected to grow by 6.04% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 29.90%.

Float and Shares Shorts:

At present, 203.38 million ETR shares are outstanding with a float of 202.66 million shares on hand for trading. On Aug 30, 2022, short shares totaled 4.21 million, which was 2.07% higher than short shares on Jul 28, 2022. In addition to Mr. Leo P. Denault as the firm’s Chairman & CEO, Mr. Andrew S. Marsh serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 92.69% of ETR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 56.83% of ETR, in contrast to 34.15% held by mutual funds. Shares owned by individuals account for 0.95%. As the largest shareholder in ETR with 11.48% of the stake, The Vanguard Group, Inc. holds 23,343,484 shares worth 23,343,484. A second-largest stockholder of ETR, BlackRock Fund Advisors, holds 13,482,792 shares, controlling over 6.63% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in ETR, holding 12,704,364 shares or 6.25% stake. With a 2.96% stake in ETR, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 6,024,944 shares are owned by the mutual fund manager. The Washington Mutual Investors Fund, which owns about 2.75% of ETR stock, is the second-largest Mutual Fund holder. It holds 5,586,229 shares valued at 644.09 million. Vanguard Mid Cap Index Fund holds 2.30% of the stake in ETR, owning 4,669,152 shares worth 538.35 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, ETR reported revenue of $3.40B and operating income of -$82.93M. Over the past year, revenue came in at $12.35B while operating income stood at $1.82B. It generated $164.01M net income for the quarter, which came to $1.22B over the last twelve months. The EBITDA in the recently reported quarter was $504.87M and diluted EPS was $0.78. EBITDA for the full year was $3.96B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ETR since 20 analysts follow the stock currently. There are 13 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ETR analysts setting a high price target of $144.00 and a low target of $115.00, the average target price over the next 12 months is $129.88. Based on these targets, ETR could surge 26.4% to reach the target high and rise by 0.95% to reach the target low. Reaching the average price target will result in a growth of 14.01% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ETR will report FY 2022 earnings on 02/22/2023. Analysts have provided yearly estimates in a range of $6.43 being high and $6.26 being low. For ETR, this leads to a yearly average estimate of $6.37. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Entergy Corporation surprised analysts by $0.41 when it reported $1.78 EPS against a consensus estimate of $1.37. The surprise factor in the prior quarter was -$0.02. Based on analyst estimates, the high estimate for the next quarter is $2.86 and the low estimate is $2.52. The average estimate for the next quarter is thus $2.67.

Summary of Insider Activity:

Insiders traded ETR stock several times over the past three months with 9 Buys and 1 Sells. In these transactions, 1,710 shares were bought while 161 shares were sold. The number of buy transactions has increased to 88 while that of sell transactions has risen to 85 over the past year. The total number of shares bought during that period was 456,855 while 309,467 shares were sold.

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