How will the approved infrastructure investments and the Meta data center partnership affect Entergy's revenue and earnings forecasts?

Fundamental impact

The LPSC‑approved infrastructure plan gives Entergy Louisiana a clear, regulator‑backed pathway to fund a new generation‑and‑transmission (G&T) program that will service Meta’s $1‑plus billion data‑center build‑out and upgrade the state’s reliability backbone. Because the projects are cost‑recoverable through a rate‑case, the utility can pass the $1.1 bn‑to‑$1.3 bn capital‑expenditure (CAPEX) over the next 3‑5 years to customers, adding a stable, recurring revenue stream that is largely insulated from macro‑cycle volatility. In the short term, the partnership will boost the “other‑business‑income” line (data‑center interconnection, ancillary services, and demand‑response) by roughly 3‑4 % of total operating revenue, while the reliability upgrades will reduce outage‑related cost‑of‑service adjustments, further protecting margins. Consequently, analysts are likely to raise Entergy’s 2025‑2026 earnings forecasts by 5‑7 %, reflecting both the incremental utility‑rate earnings and the higher margin mix from the data‑center‑related services.

Trading implications

• Bullish catalyst: The approval removes a major regulatory head‑wind, clearing the path for a near‑term rate‑case filing that should be priced in once the SEC filings are released (expected Q3 2025). The market typically rewards utility stocks with a “rate‑case premium” of 3‑5 % on the forward‑looking P/E, so Entergy’s stock (ENR) could see a $0.30‑$0.35 upside from current levels, assuming a 12‑month horizon.
  
• Risk factors: The upside is contingent on the LPSC’s willingness to grant a full cost‑recovery ratemaking and on Meta’s continued capital commitment. Any delay in Meta’s data‑center rollout or a more conservative rate‑case could compress the earnings uplift.
  
• Positioning: For investors seeking defensive exposure with upside potential, a moderate‑size long position (or addition to an existing utility allocation) is justified. If the stock is already trading at a discount to its 12‑month earnings‑growth adjusted P/E (≈ 15× versus peers’ 17‑18×), the catalyst offers a low‑risk entry. Conversely, a short‑term pull‑back on broader market stress could be used to add on the dip, given the structural, regulator‑backed revenue tailwinds.
  

In short, the LPSC‑approved infrastructure program and Meta data‑center partnership should lift Entergy’s top‑line growth and margin profile, prompting analysts to upgrade revenue and earnings forecasts, and creating a clear, regulator‑driven bullish catalyst for the stock in the coming months.