Entergy (ETR) PT Raised to $77 at Goldman Sachs, Stock Remains Neutral Rated

Goldman Sachs maintained a Neutral rating on Entergy Corp (NYSE: ETR) and increased its price target to $77.00 (from $72.00).

Analyst Michael Lapides said, "We raise our SOTP-based 12-month price target from $72 to $77, primarily driven by the higher regulated earnings forecast, implying 2% total return. We continue to value ETR using an unchanged 13.5x P/E multiple on 2015E regulated EPS, a slight discount to regulated baseline multiple of 14.0x; and 6.5x EV/EBITDA on 2015E EBITDA to value the merchant segment, in line with the multiple used to value all generation subsidiaries of Diversified Utilities under our coverage. We note every 0.50x/0.50x change to our P/E and EBITDA multiples impacts our estimated value per share by roughly $3/$1."

"We still expect a declining earnings trajectory for ETR’s merchant subsidiary as above-market hedges expire. We use $4.25-$4.50/MMBtu natural gas price assumptions through 2016 and note that every $0.25/MMBtu change in gas price or every 500MMBtu/MWh change in heat rate impacts our 2016E/2017E EPS by roughly 4%-5%," he added.

For an analyst ratings summary and ratings history on Entergy Corp click here. For more ratings news on Entergy Corp click here.

Shares of Entergy Corp closed at $78.61 yesterday.

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