Entergy’s $3B Texas expansion fuels growth as industrial energy demand surges

Texas is the battleground for Entergy’s boldest bet yet. With $3B in upgrades and two massive power plants underway, can the energy giant deliver—or will rate hikes spark backlash?

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2026 January 18 . 1:21 PM

2 min read

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Entergy’s $3B Texas expansion fuels growth as industrial energy demand surges

Entergy is expanding rapidly to meet rising industrial demand, with major projects underway in Texas. The company’s growth strategy includes new power plants, infrastructure upgrades, and a $1.3 billion AI data centre. Analysts remain optimistic, with most rating the stock a 'Buy' as earnings season approaches.

Entergy’s latest expansion focuses on Texas, where two gas-fired power plants—Legend and Lone Star 9—are under construction. The Legend Power Station alone carries a $1.6 billion price tag and will add over 600 MW of capacity by mid-2028. Completing these projects on time and within budget would support the company’s earnings growth targets.

The Southeast Texas Energy Plan (STEP Ahead) is also advancing as planned. In January 2026, Entergy Texas opened the Millbend Substation in Montgomery County, the first phase of upgrades to serve growing areas like New Caney and Porter. Meanwhile, construction of the Orange County Advanced Power Station began in late 2025. These investments aim to handle a projected 40% demand surge by 2028, though rate increases may follow.

Management has raised capital expenditure by $3 billion to support an expected 13% annual growth in industrial demand. This push aligns with an 8%+ earnings-per-share (EPS) growth target through 2028. Recent insider activity saw an executive sell nearly 1,000 shares, though analysts remain bullish. Barclays kept its 'Buy' rating with a $96 price target, while the average among 17 analysts stands at $103.12.

Entergy’s premium valuation, reflected in a P/E ratio of 23.79—higher than peers like Exelon (~15.9)—stems from these growth plans. The next key event is the upcoming quarterly earnings report, which could reinforce confidence in the strategy.

Entergy’s infrastructure push and power plant projects aim to secure long-term growth amid rising energy demand. With most analysts backing the stock and earnings on the horizon, the company’s next steps will be closely watched. Success in Texas could justify its current premium valuation and support further expansion.