Is Entergy Corp. overvalued or undervalued?

As of 18 February 2025, Entergy Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued based on its financial metrics. Key ratios indicate a P/E ratio of 34, a Price to Book Value of 2.67, and an EV to EBITDA of 13.27, all of which are significantly higher than industry averages.
In comparison to peers, Entergy's P/E ratio of 34 is much higher than Constellation Energy Corp. at 26.62 and Dominion Energy, Inc. at 17.88, which further underscores its overvaluation. Additionally, Entergy's ROCE stands at 6.35% and ROE at 7.83%, which do not justify the high valuation multiples. Despite a strong one-year stock return of 56.15% compared to the S&P 500's 10.26%, the underlying financial ratios suggest that Entergy Corp. is not a sound investment at its current price of 82.61.