Entergy's Grid and Renewable Investments Strengthen Growth Outlook

Entergy Corporation’s ETR strategic capital investments in grid upgrades will help it serve customers more efficiently. The company also continues to make steady progress on adding renewable generation to its portfolio.

However, this Zacks Rank #3 (Hold) company faces risks related to the impact of nuclear fuel price volatility.

Factors Acting in Favor of ETR Stock

Entergy boasts a detailed capital investment plan aimed at modernizing, decarbonizing, and diversifying its portfolio, including the potential construction of additional generation capacity. The company currently plans to invest $41 billion during 2026-2029 to primarily upgrade its distribution, generation and transmission as well as support renewable expansion. 

Of this four-year capital plan, $16 billion is allocated to transmission and distribution investments to improve the company’s reliability and resilience as a utility provider, while also supporting renewable expansion and customer growth. The investment plan also includes a strategy of $16 billion for investments in generation projects to modernize, decarbonize, expand and diversify Entergy’s portfolio.

Entergy and NextEra Energy Resources are working together to develop up to 4.5 GW of new, utility-owned solar generation and energy storage projects. Such initiatives will enable the company to achieve its target of adding more than 5,000 MW of solar power by the end of 2028 and up to 14-17 GW of renewable energy in service by the end of 2031.

Headwinds for ETR Stock

Entergy’s nuclear operations depend on a mix of fuel contracts and inventory that should ensure enough supply through 2027 at stable prices. However, this stability relies on uranium miners and overall market conditions. Although Entergy can turn to other suppliers if needed, the cost of replacement uranium would depend on market prices, which have historically been unpredictable.

Fuel price volatility could increase due to tariffs, domestic purchase requirements, supply-chain issues, import limits and geopolitical tensions. While Entergy’s contracts offer some protection, long-term fuel costs remain uncertain. Any major increase in prices or disruptions in supply could affect the company’s financial health, liquidity and operations, creating risks for investors.

ETR’s Share Price Performance

In the past six months, shares of the company have risen 4.7% compared with the industry’s 6.5% growth.

Stocks to Consider

Some better-ranked stocks from the same industry are NiSource NI, Ameren AEE and Pinnacle West Capital PNW, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NiSource’s long-term (three to five years) earnings growth rate is 5.97%. The Zacks Consensus Estimate for NI’s 2026 earnings per share (EPS) implies an improvement of 8.5% year over year. 

AEE’s long-term earnings growth rate is 8.52%. The company delivered an average earnings surprise of 0.22% in the last four quarters.

PNW’s long-term earnings growth rate is 3.56%. The Zacks Consensus Estimate for PNW’s 2026 sales implies an improvement of 4.6% year over year. 

 

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This article originally published on Zacks Investment Research (zacks.com).

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