UPDATE: Jefferies Color On ETR Target Adjustment

Jefferies, which lowered its PT on shares of Entergy ETR, is providing some color on the stock. “Our price target is $75 (revised from $76),” Jefferies writes. “Our sum-of-the-parts valuation applies an industry average P/E multiple to the utility segment and an EV/EBITDA multiple of 10x (2013-2014) to merchant generation adjusted EBITDA. “Our valuation reflects forward commodity prices and hedges, a haircut for risk associated with a possible regulatory requirement to add cooling towers at Indian Point and NPV of federal NOLs. “Although our model haircuts pricing from Vermont Yankee post contract (after March 2012), our valuation assumes the plant is relicensed; we estimate that a potential early shutdown could have a $2.50-3.00 per share negative impact on valuation.” Entergy closed Wednesday at $71.09.