Entergy (ETR) Stock May Be Above Fair Value Despite Equity Raise

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Entergy (ETR) Stock May Be Above Fair Value Despite Equity Raise Bailey Pemberton Fri, July 3, 2026 at 7:12 AM EDT 4 min read ETR META Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Entergy stock has delivered a strong 168.9% total return over the past five years. Its current checks point to a richer valuation, with the Dividend Discount Model (DDM) suggesting the shares trade at a premium to intrinsic value, while market based multiples look roughly in line. Over five years, Entergy has returned 168.9%. This puts extra focus on whether the current price already reflects much of that progress. Recent equity issuance through the ATM and underwritten forward sale agreements can support Entergy's balance sheet and funding for projects such as the Meta data center deal, but also introduces dilution risk for existing shareholders. Entergy scores 0 out of 6 on the broader valuation checks at this link , which leans more toward the stock being expensive than a clear bargain. The issue now is whether Entergy's current share price still offers an attractive entry point after this long run and mixed valuation signals, or if most of the upside is already reflected. Entergy delivered 44.1% returns over the last year. See how this stacks up to the rest of the Electric Utilities industry. The Dividend Discount Model (DDM) values Entergy by projecting its future dividend stream and discounting it back to today. For Entergy, the model uses a recent annual dividend of about $2.87 per share, an estimated return on equity of 11.16% and a payout ratio around 61%, which implies room for reinvestment alongside ongoing dividends. To avoid overly aggressive inputs, dividend growth is capped at 3.54%, slightly below the underlying 4.34% estimate, with an overall expected growth assumption of about 4.34%. Based on these inputs, the DDM points to an intrinsic value of about $80 per share, which indicates the stock is roughly 43.3% above what this dividend projection supports. Because Entergy is also issuing equity through ATM and underwritten forward sale agreements to fund projects such as the Meta data center deal, the market may be assigning a premium to the stock despite the dilution risk that comes with those new shares. On this dividend-based view, Entergy stock currently screens as overvalued relative to its estimated intrinsic value. Our Dividend Discount Model (DDM) analysis suggests Entergy may be overvalued by 43.3%. Discover 43 high quality undervalued stocks or create your own screener to find better value opportunities. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Entergy. P/E is a useful lens for Entergy because earnings drive both dividends and the capacity to fund large capital projects. Entergy currently trades on a P/E of about 29.6x, compared with an Electric Utilities industry average of roughly 22.5x and a peer average near 19.0x, so the stock sits at a clear premium to both groups. On a more tailored view, the Fair Ratio model points to a P/E of about 26.9x as reasonable for Entergy given its profile. That is moderately below the present 29.6x. This suggests the market is paying up, but not to an extreme degree relative to what the model implies. Overall, Entergy appears priced roughly in line with what its earnings profile would justify, so the P/E multiple seems close to fairly valued. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Entergy pick up where the valuation work leaves off by spelling out the earnings, margin and growth paths that would need to hold for Entergy's stock to be worth meaningfully more or less than today's price. Instead of stopping at a single output from a ratio or model, these scenarios unpack the future that figure relies on so you can monitor how Entergy's actual progress lines up on the Community page. Share your own Narrative on Entergy and be one of the early voices in the Simply Wall St community, putting a clear, number driven case on whether the Meta data center agreement and recent equity issuance ultimately add up for shareholders. Set out your view today, then track how it holds up as Entergy's actual results and project updates come through. Do you think there's more to the story for Entergy? Head over to our Community to see what others are saying! For Entergy, the Dividend Discount Model (DDM) flags the stock as overvalued relative to its intrinsic value estimate, while the P/E based view suggests the current multiple sits roughly in line with peers and a tailored fair value range. That split, together with a low broader value score, points to a setup where expectations already assume a lot from future projects and capital deployment. From here, the key question is whether Entergy can deliver the cash flows and manage dilution from recent equity issuance in a way that justifies holding its current valuation. 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. Companies discussed in this article include ETR . Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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