Core Thesis - Entergy Corporation (ETR) is positioned for growth through a significant capital investment plan aimed at enhancing the Southern U.S. power grid and meeting the rising demand from industrial and hyperscale data centers [1][2][3] Company Overview - Entergy serves approximately 3 million customers across Arkansas, Louisiana, Mississippi, and Texas, with a diversified generation mix that includes five nuclear reactors providing around 5,000 MW of carbon-free energy, a substantial gas fleet, and expanding renewable energy sources [2] Financial Performance - ETR demonstrates strong profitability metrics for a regulated utility, with a gross margin of 49.1%, operating margin of 26.9%, and an EBITDA margin of approximately 49.3%, supported by effective cost management and favorable rate recovery [4] - The company reported an operating cash flow of $4.74 billion against a capital expenditure of $7.1 billion, leading to negative free cash flow, which is anticipated due to its growth-focused investment strategy [4] - Total debt stands at $30.4 billion, with a debt/EBITDA ratio of around 5.0x and EBIT/interest coverage of 2.9x, indicating a balance sheet consistent with industry peers [4] Growth Strategy - Entergy's $37 billion investment plan for 2025–2028 focuses on generation additions, transmission and distribution upgrades, and storm-hardening initiatives, ensuring long-term reliability while integrating large-scale renewable projects funded by major customers like AWS and AVAIO [3] - The financial model allows Entergy to expand capacity and modernize the grid without imposing significant rate increases on other customers, as large users bear the incremental costs [5] Market Outlook - Near-term value is contingent on the pace of regulatory approvals, commissioning of new plants, and growth in industrial load [5] - The stock has experienced a slight pullback from all-time highs but remains in a long-term uptrend, with potential entry points identified between $84 and $86, and targets of $96 to $102 if momentum persists [5] - Entergy is viewed as a long-term investment opportunity that combines regulated growth, infrastructure modernization, and favorable industrial load trends, promising durable earnings and compounding returns [5]