Jim Cramer on Entergy: “The Stock’s Actually Going to Look Cheaper Forward”

Entergy Corporation (NYSE:ETR) is one of the stocks Jim Cramer put under the spotlight. Cramer discussed the company’s “incredible run,” as he commented:

“We need to talk about this incredible run in Entergy, the New Orleans-based electric utility, which has seen the stock move up from $87 to $97 in a month, I mean, come on, including some big moves just over the last two sessions. So Entergy hit a new all-time high, which has become a semi-regular occurrence these days, with the stock now up more than 28% year to date. Mind you, this is a utility stock. What’s driving this latest leg higher? Okay, last Thursday night, Entergy announced that its Arkansas subsidiary will be powering Google’s new $4 billion data center in West Memphis. This is just the latest example of a regulated utility catching fire thanks to some new AI data center announcements…

It’s a tad expensive here, trading at 25 times this year’s earnings estimates. I’m not used to paying nearly that much for electricity, but I’m willing to pay up for a dependable company with accelerating earnings growth. Plus, the stock’s actually going to look cheaper forward. It sells for roughly 22 times next year’s numbers, and I expect more data center announcements that will send this thing higher and then higher again. It’s got some nukes too. It’ll take many years for these to pay off. But again, this is the first time in decades that the regulated utilities have had anything remotely resembling a growth story.”

Entergy Corporation (NYSE:ETR) produces and distributes electricity and natural gas, generating power from gas, nuclear, coal, hydro, and solar sources.

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Disclosure: None. This article is originally published at Insider Monkey.