What Entergy (ETR)'s Gas Plant Buildout and Mackenzie Stake Cut Mean For Shareholders

• In the second quarter, Mackenzie Financial Corp reduced its holdings in Entergy Corporation by very large %, selling 150,266 shares and retaining 100,807 shares in the utilities provider.
• Around the same time, Entergy Louisiana broke ground on two highly efficient natural gas-fired plants totaling about 1,500 megawatts, a build-out closely tied to Meta’s new data center and projected to save customers roughly US$650 million over 15 years while supporting growing regional power needs.
• We’ll now examine how these new Louisiana gas projects, alongside the large institutional stake reduction, may influence Entergy’s investment narrative.

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Entergy Investment Narrative Recap

To own Entergy, you need to believe in steady, regulated growth from large capital projects and rising power demand in the Gulf South, balanced against funding needs and regulatory oversight. The Louisiana gas plants align with this thesis by supporting industrial and data center load, while Mackenzie’s stake cut does not appear to materially alter the near term catalyst of rate base growth or the key risk around financing a large capital plan without pressuring returns.

The most relevant news is Entergy Louisiana’s 1,500 megawatt gas build supporting Meta’s data center, which directly links to expectations for long term load growth and a larger regulated asset base. If regulators continue to allow timely cost recovery on these projects, they may support earnings consistency, but they also increase exposure to future policy shifts and potential stranded asset concerns if decarbonization rules tighten more quickly than anticipated.

Yet while these projects aim to support growth, the scale of planned capital spending and its funding implications are something investors should be aware of...

Read the full narrative on Entergy (it's free!)

Entergy's narrative projects $15.5 billion revenue and $2.5 billion earnings by 2028. This requires 7.9% yearly revenue growth and about a $0.7 billion earnings increase from $1.8 billion today.

Uncover how Entergy's forecasts yield a $104.06 fair value, a 10% upside to its current price.

Exploring Other Perspectives

Six fair value estimates from the Simply Wall St Community span roughly US$73 to US$104 per share, underlining how far apart individual views can be. You can weigh those against the risk that Entergy’s sizeable capital plan might require extra debt or equity, with potential consequences for returns if cash flow or regulatory support fall short.

Explore 6 other fair value estimates on Entergy - why the stock might be worth 23% less than the current price!

Build Your Own Entergy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Entergy research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Entergy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Entergy's overall financial health at a glance.

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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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