Intrinsic value of Entergy - ETR

Previous Close

$85.14

  Intrinsic Value

$10.76

stock screener

  Rating & Target

str. sell

-87%

Previous close

$85.14

 
Intrinsic value

$10.76

 
Up/down potential

-87%

 
Rating

str. sell

We calculate the intrinsic value of ETR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 15.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  11,063
  11,317
  11,608
  11,935
  12,297
  12,694
  13,126
  13,594
  14,098
  14,639
  15,218
  15,835
  16,493
  17,192
  17,934
  18,719
  19,551
  20,431
  21,361
  22,342
  23,378
  24,470
  25,621
  26,834
  28,112
  29,457
  30,872
  32,362
  33,929
  35,578
Variable operating expenses, $m
  3,882
  3,971
  4,072
  4,185
  4,311
  4,449
  4,599
  4,762
  4,937
  5,125
  5,289
  5,503
  5,732
  5,975
  6,232
  6,505
  6,795
  7,100
  7,423
  7,764
  8,124
  8,504
  8,904
  9,325
  9,769
  10,237
  10,729
  11,247
  11,791
  12,364
Fixed operating expenses, $m
  8,278
  8,460
  8,646
  8,837
  9,031
  9,230
  9,433
  9,640
  9,852
  10,069
  10,291
  10,517
  10,748
  10,985
  11,227
  11,474
  11,726
  11,984
  12,248
  12,517
  12,792
  13,074
  13,362
  13,655
  13,956
  14,263
  14,577
  14,897
  15,225
  15,560
Total operating expenses, $m
  12,160
  12,431
  12,718
  13,022
  13,342
  13,679
  14,032
  14,402
  14,789
  15,194
  15,580
  16,020
  16,480
  16,960
  17,459
  17,979
  18,521
  19,084
  19,671
  20,281
  20,916
  21,578
  22,266
  22,980
  23,725
  24,500
  25,306
  26,144
  27,016
  27,924
Operating income, $m
  -1,098
  -1,114
  -1,110
  -1,087
  -1,046
  -985
  -906
  -808
  -692
  -555
  -361
  -185
  13
  232
  475
  740
  1,031
  1,347
  1,690
  2,061
  2,461
  2,892
  3,356
  3,853
  4,386
  4,957
  5,567
  6,218
  6,913
  7,654
EBITDA, $m
  1,845
  1,896
  1,976
  2,085
  2,221
  2,386
  2,578
  2,799
  3,048
  3,327
  3,635
  3,974
  4,344
  4,747
  5,184
  5,656
  6,165
  6,712
  7,299
  7,928
  8,600
  9,318
  10,084
  10,900
  11,768
  12,692
  13,674
  14,716
  15,823
  16,996
Interest expense (income), $m
  747
  825
  868
  916
  971
  1,033
  1,101
  1,176
  1,257
  1,345
  1,440
  1,542
  1,652
  1,768
  1,892
  2,024
  2,164
  2,312
  2,469
  2,635
  2,810
  2,995
  3,190
  3,396
  3,613
  3,842
  4,083
  4,336
  4,603
  4,884
  5,180
Earnings before tax, $m
  -1,922
  -1,982
  -2,026
  -2,058
  -2,078
  -2,086
  -2,082
  -2,066
  -2,037
  -1,996
  -1,904
  -1,836
  -1,755
  -1,660
  -1,549
  -1,423
  -1,281
  -1,122
  -945
  -749
  -534
  -298
  -40
  240
  544
  874
  1,231
  1,615
  2,029
  2,474
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  65
  147
  236
  332
  436
  548
  668
Net income, $m
  -1,922
  -1,982
  -2,026
  -2,058
  -2,078
  -2,086
  -2,082
  -2,066
  -2,037
  -1,996
  -1,904
  -1,836
  -1,755
  -1,660
  -1,549
  -1,423
  -1,281
  -1,122
  -945
  -749
  -534
  -298
  -40
  175
  397
  638
  898
  1,179
  1,481
  1,806

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  46,877
  47,955
  49,187
  50,571
  52,104
  53,786
  55,618
  57,601
  59,737
  62,030
  64,482
  67,099
  69,886
  72,847
  75,990
  79,320
  82,845
  86,573
  90,511
  94,670
  99,058
  103,686
  108,564
  113,704
  119,117
  124,816
  130,815
  137,128
  143,769
  150,754
Adjusted assets (=assets-cash), $m
  46,877
  47,955
  49,187
  50,571
  52,104
  53,786
  55,618
  57,601
  59,737
  62,030
  64,482
  67,099
  69,886
  72,847
  75,990
  79,320
  82,845
  86,573
  90,511
  94,670
  99,058
  103,686
  108,564
  113,704
  119,117
  124,816
  130,815
  137,128
  143,769
  150,754
Revenue / Adjusted assets
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
Average production assets, $m
  29,051
  29,719
  30,483
  31,341
  32,291
  33,333
  34,469
  35,697
  37,021
  38,442
  39,962
  41,584
  43,311
  45,146
  47,094
  49,157
  51,342
  53,652
  56,093
  58,671
  61,390
  64,258
  67,281
  70,466
  73,821
  77,353
  81,071
  84,983
  89,099
  93,428
Working capital, $m
  -420
  -430
  -441
  -454
  -467
  -482
  -499
  -517
  -536
  -556
  -578
  -602
  -627
  -653
  -681
  -711
  -743
  -776
  -812
  -849
  -888
  -930
  -974
  -1,020
  -1,068
  -1,119
  -1,173
  -1,230
  -1,289
  -1,352
Total debt, $m
  16,079
  16,967
  17,983
  19,123
  20,386
  21,772
  23,282
  24,915
  26,676
  28,565
  30,586
  32,742
  35,038
  37,478
  40,068
  42,812
  45,716
  48,788
  52,034
  55,460
  59,076
  62,890
  66,909
  71,144
  75,604
  80,301
  85,244
  90,445
  95,917
  101,673
Total liabilities, $m
  38,626
  39,515
  40,530
  41,671
  42,934
  44,320
  45,829
  47,463
  49,223
  51,113
  53,134
  55,290
  57,586
  60,026
  62,616
  65,360
  68,264
  71,336
  74,581
  78,008
  81,624
  85,437
  89,457
  93,692
  98,152
  102,848
  107,792
  112,993
  118,465
  124,221
Total equity, $m
  8,250
  8,440
  8,657
  8,901
  9,170
  9,466
  9,789
  10,138
  10,514
  10,917
  11,349
  11,810
  12,300
  12,821
  13,374
  13,960
  14,581
  15,237
  15,930
  16,662
  17,434
  18,249
  19,107
  20,012
  20,965
  21,968
  23,023
  24,134
  25,303
  26,533
Total liabilities and equity, $m
  46,876
  47,955
  49,187
  50,572
  52,104
  53,786
  55,618
  57,601
  59,737
  62,030
  64,483
  67,100
  69,886
  72,847
  75,990
  79,320
  82,845
  86,573
  90,511
  94,670
  99,058
  103,686
  108,564
  113,704
  119,117
  124,816
  130,815
  137,127
  143,768
  150,754
Debt-to-equity ratio
  1.950
  2.010
  2.080
  2.150
  2.220
  2.300
  2.380
  2.460
  2.540
  2.620
  2.700
  2.770
  2.850
  2.920
  3.000
  3.070
  3.140
  3.200
  3.270
  3.330
  3.390
  3.450
  3.500
  3.560
  3.610
  3.660
  3.700
  3.750
  3.790
  3.830
Adjusted equity ratio
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,922
  -1,982
  -2,026
  -2,058
  -2,078
  -2,086
  -2,082
  -2,066
  -2,037
  -1,996
  -1,904
  -1,836
  -1,755
  -1,660
  -1,549
  -1,423
  -1,281
  -1,122
  -945
  -749
  -534
  -298
  -40
  175
  397
  638
  898
  1,179
  1,481
  1,806
Depreciation, amort., depletion, $m
  2,943
  3,010
  3,086
  3,172
  3,267
  3,371
  3,485
  3,607
  3,740
  3,882
  3,996
  4,158
  4,331
  4,515
  4,709
  4,916
  5,134
  5,365
  5,609
  5,867
  6,139
  6,426
  6,728
  7,047
  7,382
  7,735
  8,107
  8,498
  8,910
  9,343
Funds from operations, $m
  1,020
  1,028
  1,060
  1,113
  1,189
  1,285
  1,403
  1,542
  1,703
  1,886
  2,092
  2,322
  2,576
  2,855
  3,160
  3,493
  3,853
  4,243
  4,664
  5,118
  5,605
  6,128
  6,688
  7,222
  7,780
  8,373
  9,005
  9,677
  10,391
  11,149
Change in working capital, $m
  -8
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -23
  -25
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -42
  -44
  -46
  -49
  -51
  -54
  -57
  -60
  -63
Cash from operations, $m
  1,029
  1,037
  1,071
  1,126
  1,202
  1,300
  1,419
  1,560
  1,722
  1,907
  2,114
  2,345
  2,601
  2,882
  3,188
  3,522
  3,885
  4,277
  4,700
  5,155
  5,644
  6,169
  6,731
  7,268
  7,828
  8,425
  9,059
  9,734
  10,451
  11,212
Maintenance CAPEX, $m
  -2,848
  -2,905
  -2,972
  -3,048
  -3,134
  -3,229
  -3,333
  -3,447
  -3,570
  -3,702
  -3,844
  -3,996
  -4,158
  -4,331
  -4,515
  -4,709
  -4,916
  -5,134
  -5,365
  -5,609
  -5,867
  -6,139
  -6,426
  -6,728
  -7,047
  -7,382
  -7,735
  -8,107
  -8,498
  -8,910
New CAPEX, $m
  -574
  -668
  -764
  -857
  -950
  -1,043
  -1,135
  -1,229
  -1,324
  -1,421
  -1,520
  -1,622
  -1,727
  -1,835
  -1,947
  -2,064
  -2,185
  -2,310
  -2,441
  -2,577
  -2,720
  -2,868
  -3,023
  -3,185
  -3,355
  -3,532
  -3,718
  -3,912
  -4,116
  -4,329
Cash from investing activities, $m
  -3,422
  -3,573
  -3,736
  -3,905
  -4,084
  -4,272
  -4,468
  -4,676
  -4,894
  -5,123
  -5,364
  -5,618
  -5,885
  -6,166
  -6,462
  -6,773
  -7,101
  -7,444
  -7,806
  -8,186
  -8,587
  -9,007
  -9,449
  -9,913
  -10,402
  -10,914
  -11,453
  -12,019
  -12,614
  -13,239
Free cash flow, $m
  -2,393
  -2,536
  -2,665
  -2,780
  -2,882
  -2,972
  -3,049
  -3,116
  -3,172
  -3,216
  -3,250
  -3,273
  -3,284
  -3,285
  -3,274
  -3,251
  -3,216
  -3,168
  -3,106
  -3,031
  -2,942
  -2,838
  -2,717
  -2,645
  -2,573
  -2,490
  -2,394
  -2,285
  -2,163
  -2,027
Issuance/(repayment) of debt, $m
  804
  888
  1,016
  1,140
  1,263
  1,386
  1,509
  1,634
  1,760
  1,889
  2,021
  2,156
  2,296
  2,440
  2,589
  2,744
  2,905
  3,072
  3,246
  3,427
  3,616
  3,813
  4,019
  4,235
  4,460
  4,696
  4,943
  5,202
  5,472
  5,756
Issuance/(repurchase) of shares, $m
  2,091
  2,172
  2,243
  2,302
  2,348
  2,382
  2,404
  2,415
  2,413
  2,399
  2,336
  2,297
  2,246
  2,181
  2,102
  2,009
  1,901
  1,778
  1,638
  1,481
  1,306
  1,112
  899
  729
  555
  365
  158
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,895
  3,060
  3,259
  3,442
  3,611
  3,768
  3,913
  4,049
  4,173
  4,288
  4,357
  4,453
  4,542
  4,621
  4,691
  4,753
  4,806
  4,850
  4,884
  4,908
  4,922
  4,925
  4,918
  4,964
  5,015
  5,061
  5,101
  5,202
  5,472
  5,756
Total cash flow (excl. dividends), $m
  501
  524
  594
  662
  729
  797
  864
  932
  1,002
  1,072
  1,107
  1,181
  1,257
  1,336
  1,418
  1,503
  1,591
  1,682
  1,777
  1,876
  1,980
  2,088
  2,201
  2,319
  2,442
  2,572
  2,707
  2,916
  3,309
  3,728
Retained Cash Flow (-), $m
  -2,091
  -2,172
  -2,243
  -2,302
  -2,348
  -2,382
  -2,404
  -2,415
  -2,413
  -2,399
  -2,336
  -2,297
  -2,246
  -2,181
  -2,102
  -2,009
  -1,901
  -1,778
  -1,638
  -1,481
  -1,306
  -1,112
  -899
  -905
  -953
  -1,003
  -1,056
  -1,111
  -1,169
  -1,229
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,589
  -1,648
  -1,649
  -1,640
  -1,619
  -1,585
  -1,540
  -1,482
  -1,411
  -1,327
  -1,229
  -1,116
  -988
  -845
  -684
  -507
  -311
  -96
  139
  395
  674
  976
  1,302
  1,414
  1,490
  1,568
  1,651
  1,805
  2,140
  2,499
Discount rate, %
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
  -1,469
  -1,397
  -1,272
  -1,141
  -1,006
  -873
  -742
  -619
  -504
  -401
  -309
  -231
  -166
  -113
  -72
  -41
  -19
  -4
  5
  9
  11
  11
  9
  6
  4
  3
  2
  1
  1
  0
Current shareholders' claim on cash, %
  87.9
  77.2
  67.6
  59.3
  52.0
  45.7
  40.3
  35.6
  31.6
  28.2
  25.3
  22.9
  20.8
  19.0
  17.5
  16.2
  15.1
  14.2
  13.4
  12.8
  12.3
  11.9
  11.6
  11.3
  11.2
  11.1
  11.0
  11.0
  11.0
  11.0

Entergy Corporation is a holding company. The Company is an integrated energy company engaged in electric power production and retail electric distribution operations. The Company operates through two business segments: Utility and Entergy Wholesale Commodities. The Utility segment includes the generation, transmission, distribution and sale of electric power to retail and wholesale customers in areas of Arkansas, Mississippi, Texas and Louisiana, including the City of New Orleans and operates a natural gas distribution business. The Entergy Wholesale Commodities segment includes the ownership, operation and decommissioning of nuclear power plants located in the northern United States and the sale of the electric power produced by its operating plants to wholesale customers. As of December 31, 2016, the Company owned and operated power plants with over 30,000 megawatts of aggregate electric generating capacity, including approximately 10,000 megawatts of nuclear-fueled capacity.

FINANCIAL RATIOS  of  Entergy (ETR)

Valuation Ratios
P/E Ratio -27
Price to Sales 1.4
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 5.1
Price to Free Cash Flow -14.6
Growth Rates
Sales Growth Rate -5.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 35.1%
Cap. Spend. - 3 Yr. Gr. Rate 7.5%
Financial Strength
Quick Ratio 2
Current Ratio 0.2
LT Debt to Equity 174.9%
Total Debt to Equity 184.4%
Interest Coverage -1
Management Effectiveness
Return On Assets -0.6%
Ret/ On Assets - 3 Yr. Avg. 0.8%
Return On Total Capital -2.4%
Ret/ On T. Cap. - 3 Yr. Avg. 0.3%
Return On Equity -6.3%
Return On Equity - 3 Yr. Avg. 0.5%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 13.7%
EBITDA Margin - 3 Yr. Avg. 21.8%
Operating Margin -8.2%
Oper. Margin - 3 Yr. Avg. 1.8%
Pre-Tax Margin -12.7%
Pre-Tax Margin - 3 Yr. Avg. -2.4%
Net Profit Margin -5.2%
Net Profit Margin - 3 Yr. Avg. 0.4%
Effective Tax Rate 59.1%
Eff/ Tax Rate - 3 Yr. Avg. 59.2%
Payout Ratio -112%

ETR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ETR stock intrinsic value calculation we used $10846 million for the last fiscal year's total revenue generated by Entergy. The default revenue input number comes from 2016 income statement of Entergy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ETR stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.2%, whose default value for ETR is calculated based on our internal credit rating of Entergy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Entergy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ETR stock the variable cost ratio is equal to 35.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8100 million in the base year in the intrinsic value calculation for ETR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Entergy.

Corporate tax rate of 27% is the nominal tax rate for Entergy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ETR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ETR are equal to 262.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Entergy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ETR is equal to -3.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8082 million for Entergy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 179 million for Entergy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Entergy at the current share price and the inputted number of shares is $15.2 billion.

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COMPANY NEWS

▶ Storm debt paid, Entergy Louisiana customers get lower bills   [Aug-01-18 02:07PM  Associated Press]
▶ Entergy: 2Q Earnings Snapshot   [07:21AM  Associated Press]
▶ Entergy Reports Second Quarter Earnings   [06:45AM  PR Newswire]
▶ Entergy Declares Dividend   [Jul-27-18 12:44PM  PR Newswire]
▶ Entergy Shows Bullish Potential   [Jun-25-18 10:06AM  TheStreet.com]
▶ Closing Bell Ringer: June 20, 2018   [Jun-20-18 04:00PM  CNBC Videos]
▶ Entergy Corporation to Host 2018 Analyst Day   [Jun-12-18 10:26AM  PR Newswire]
▶ Best Dividend Paying Stocks   [May-28-18 09:02AM  Simply Wall St.]
▶ 3 Baby Bonds Paying Over 5.5%   [May-14-18 03:05PM  InvestorPlace]
▶ Company pays hearing attendees, says it seeks sincere people   [May-11-18 04:06PM  Associated Press]
▶ Power plants: Phony backers got paid to tout utility project   [May-10-18 08:44PM  Associated Press]
▶ Top Picks For Dividend Rockstars   [09:02AM  Simply Wall St.]
▶ Entergy: 1Q Earnings Snapshot   [07:27AM  Associated Press]
▶ Entergy Reports First Quarter Earnings   [07:04AM  PR Newswire]
▶ Entergy Announces First Quarter Earnings Conference Call   [Apr-18-18 01:59PM  PR Newswire]
▶ Entergy Declares Dividend   [Apr-11-18 10:02AM  PR Newswire]
▶ Entergy Corporation Releases 2017 Integrated Report   [Mar-29-18 03:37PM  PR Newswire]
▶ [$$] Task Force Studies How to Help Locals   [Mar-21-18 07:49PM  The Wall Street Journal]
▶ Entergy Appoints John R. Burbank to Board   [Mar-01-18 04:54PM  PR Newswire]
▶ Entergy reports 4Q loss   [07:05AM  Associated Press]
▶ February Top Dividend Paying Stocks   [Feb-19-18 08:02AM  Simply Wall St.]
▶ Entergy Declares Dividend   [Jan-26-18 02:45PM  PR Newswire]
▶ 3 Baby Bonds Paying 5%-Plus   [07:00AM  InvestorPlace]
▶ ETFs with exposure to Entergy Corp. : December 29, 2017   [Dec-29-17 11:57AM  Capital Cube]
▶ ETFs with exposure to Entergy Corp. : December 18, 2017   [Dec-18-17 03:28PM  Capital Cube]
▶ FirstEnergy: Analysts Target Price and Views   [07:34AM  Market Realist]
▶ ETFs with exposure to Entergy Corp. : December 7, 2017   [Dec-07-17 01:40PM  Capital Cube]
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