What changed
$ETR — Provides electricity and natural gas to customers.
🎯 Q1 FY26 | Rev $3B | EPS $0.86 vs $0.84 🟢 | Margin 17.9%
💡 Consensus expects steady regulated utility growth. The small EPS beat (2.26%) is already priced in; the real story is the massive capex ($2.25B in Q1 alone) and negative FCF (-$1.42B), which the market may be underestimating as a risk to future returns or dividends.
🏢 Business Quality: 6/10 | Valuation: fair
📉 Reward/Risk: upside 10% to $120 (if capex yields growth) vs downside 15% to $93 (if FCF concerns mount) – ratio 0.67:1, unfavorable.
🔮 Catalyst: Next quarterly earnings (late July 2026) – watch for updated capex plans, FCF trajectory, and any regulatory decisions on rate cases. Failure signal: FCF worsens or guidance is cut.
💰 Entry: Current price $109.66 is not attractive; wait for pullback to $100-102 (18-19x forward EPS) for better risk/reward.
Also in play: $WEC $DTE $CMS $AEP $FE $GE