We raise our 12-month target $13 to $127, 20.1x our 2022 EPS estimate (cut by $0.02 to $6.32; 2023 estimate raised $0.01 to $6.75), near peers and above ETR's historical average due to lower unregulated business risk. ETR posts Q1 adj. EPS of $1.32 vs. $1.47, below consensus by $0.05, with higher comparable O&M and interest costs. The Wholesale Commodities business saw lower earnings due to ongoing merchant nuclear plant shutdowns, as ETR orients its business to more of a fully regulated utility model. ETR affirmed its 2022 EPS guidance range, with continued strength in industrial electric sales supporting an expected 2% annual retail sales growth, in line with 2021 results and above many peers, although we have some concerns about higher-than-expected O&M and depreciation costs seen YTD as well as rising interest costs given the expectation of a rising rate environment in the next 12-18 months. Positively, we see less equity dilution than before, given improvements to ETR's credit and pension status.
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