New Orleans-based Entergy Corporation (ETR) is primarily engaged in electric power production and retail distribution operations. With 30,000 MW of generating capacity, it distributes electricity to 2.6 million customers in Arkansas, Louisiana, Mississippi and Texas.
ETR is shifting towards becoming a fundamentally strong electric energy utility with the separation of its nuclear business. Higher nuclear power prices, lower taxes and O&M expenses, ongoing share repurchases, a reasonable valuation and steady recovery from the hurricane Gustav and Ike damage will continue to deliver strong earnings and cash flow growth.
However, pending regulatory approvals in New York and Vermont for the proposed spin-off of its nuclear business and tightening credit markets are likely to relegate the spinoff transaction in 2009. Therefore, we reiterate our Buy recommendation on ETR with a six-month target price of $93.
Read the full analyst report on ETR
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