Buy Entergy Corp. on Valuation

Entergy Corp. (ETR - Analyst Report) is shifting towards becoming a fundamentally strong electric energy utility with the separation of its nuclear business. Its core business shows strong earnings growth, cash flow generation, favorable regulatory rate hikes, a reasonable valuation and steady recovery from hurricane damage during September 2007.

Entergy New Orleans emerged from Chapter 11 Bankruptcy proceedings. The recent favorable ruling of the Louisiana Public Service Commission regarding storm cost recovery proceedings offsets unfavorable ruling at Entergy Arkansas. Furthermore, the company's share repurchase program continues to boost EPS.

Therefore, we reiterate our Buy recommendation on ETR with a six-month target price of $130.00. Price appreciation to our near-term valuation target, coupled with a quarterly cash dividend of $0.75 per share which appears sustainable and secure represents annualized total return potential of 18.0%.

Read the full analyst report on ETR