Entergy Corp Stock Downgraded (ETR)
NEW YORK (
)
-- Entergy
(NYSE:
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and poor profit margins.
Highlights from the ratings report include:
- Net operating cash flow has increased to $999.06 million or 31.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.86%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, ENTERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electric Utilities industry. The net income has significantly decreased by 31.4% when compared to the same quarter one year ago, falling from $233.31 million to $160.03 million.
- The debt-to-equity ratio of 1.34 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.
Entergy Corporation, together with its subsidiaries, engages in electric power production and retail electric distribution operations in the United States. The company operates in two segments, Utility and Entergy Wholesale Commodities. The company has a P/E ratio of 9.1, above the average utilities industry P/E ratio of 8.7 and below the S&P 500 P/E ratio of 17.7. Entergy has a market cap of $12.23 billion and is part of the
sector and
industry. Shares are down 5% year to date as of the close of trading on Thursday.
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