FirstEnergy: Strengthening Regulated Growth Profile and Reduced Regulatory Overhang Support Buy Rating and $50 Target

In a report released yesterday, Steve Fleishman from Wolfe Research upgraded FirstEnergy to a Buy, with a price target of $50.00.

Steve Fleishman has given his Buy rating due to a combination of factors that strengthen FirstEnergy’s growth and earnings profile. He expects the company’s expanding transmission investment program and planned West Virginia generation project to lift regulated rate base growth to roughly 10%, supporting earnings per share growth toward the high end of the 6–8% range. Management has already raised both capital spending plans and 2026 guidance, and Fleishman’s own forecasts now point to a solid multi‑year EPS compound growth trajectory. Although some equity financing will likely be needed to fund the larger capital plan, leverage and credit metrics are viewed as in line with peers, which supports balance sheet stability.

Fleishman also notes that prior regulatory risks, particularly the Ohio HB6 issue, have largely been resolved with last year’s rate order and settlement, reducing a key overhang on the stock. That Ohio outcome, including constructive returns and capital structure assumptions, provides a better foundation for future filings, and the ability to use a forward test year should help mitigate regulatory lag. While there are upcoming cases in Maryland, West Virginia, and New Jersey and some political noise in parts of its service territory, the overall regulatory track record has recently improved. Balancing these positives against the remaining policy and execution risks, he views the current valuation as attractive and sets a $50 price target, supporting his Buy recommendation.

In another report released on January 23, Barclays also maintained a Buy rating on the stock with a $50.00 price target.