FirstEnergy (FE) AI Stock Analysis

• Market Cap: $23.73B
• Dividend Yield: 4.13%
• Average Volume (3M): 6.07M
• Price to Earnings (P/E): 24.3
• Beta (1Y): 0.23
• Revenue Growth: 4.68%
• EPS Growth: -11.66%
• Country: US
• Employees: 12,294
• Sector: Utilities
• Sector Strength: 86
• Industry: Regulated Electric
• EPS (TTM): 1.70
• Shares Outstanding: 577,126,160
• 10 Day Avg. Volume: 5,945,312
• 30 Day Avg. Volume: 6,067,144
• PEG Ratio: 0.39
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.69
• Price to Cash Flow (P/CF): 7.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $43.00
• Price Target Upside: 4.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

FirstEnergy's overall score reflects its stable revenue growth and robust operational margins, despite challenges with leverage and cash flow. Strong regulatory achievements, ambitious investment plans, and a solid dividend yield enhance its attractiveness. However, external challenges and a slightly high valuation may constrain performance. The mixed technical indicators further suggest caution in the short term.

Positive Factors

Financial Guidance

FE initiated '25 EPS guidance of $2.40-2.60, the midpoint of which is 5.5% higher than '24 core EPS of $2.37.

Regulatory Developments

FE submitted SB2/HB 15 modifications to the Ohio Legislature, aligning all Ohio utilities on multi-year rate plans, and expects to offset any legislative headwinds.

Negative Factors

Earnings Pressure

FirstEnergy is exploring a Signal Peak sale while facing earnings pressure, which complicates achieving long-term growth targets.

Regulatory Risk

The company's distribution rate case in OH has to be fully litigated, increasing regulatory risk for the next year or so.

Regulatory Uncertainty

The Ohio rate case remains an overhang, causing uncertainty for FirstEnergy's earnings outlook.

FirstEnergy Business Overview & Revenue Model

Company Description

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, natural gas, wind, and solar power generating facilities. It operates 24,074 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 273,295 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.

How the Company Makes Money

FirstEnergy makes money primarily through its regulated utility operations, where it generates revenues by selling electricity to residential, commercial, and industrial customers. The company earns income from the regulated rates approved by state public utility commissions, which allow them to recover the costs of providing electricity and earn a reasonable return on their investments. Additionally, FirstEnergy's transmission operations contribute significantly to its revenue. The company charges fees for the use of its transmission network, facilitating the flow of electricity across its service areas. Furthermore, FirstEnergy engages in competitive energy services, where it sells electricity and energy-related products to wholesale and retail customers, providing another revenue stream. Strategic partnerships, regulatory incentives, and investments in grid modernization and renewable energy also play a role in enhancing the company's earnings potential.

FirstEnergy Financial Statement Overview

Summary

FirstEnergy demonstrates stable revenue growth and strong operational margins, though profitability is pressured by rising expenses. The high leverage is a concern, but improving equity suggests a strengthening financial position. Cash flow challenges persist, with negative free cash flow being a critical area for improvement. Overall, the company exhibits resilience with opportunities for enhancing financial health.

Income Statement

The company has shown stable revenue growth with a 4.68% increase in 2024. Gross profit margin remains robust at 67.51%, indicating effective cost management. However, the net profit margin decreased to 7.26% from the previous year due to rising expenses, impacting overall profitability. The EBIT and EBITDA margins are strong at 17.63% and 30.45%, respectively, reflecting solid operational efficiency.

Balance Sheet

The debt-to-equity ratio remains high at 1.93, which could pose a risk in terms of leverage. However, the equity growth indicates improving shareholder equity, as seen by the rise in stockholders' equity to $12.455 billion. Return on equity is modest at 7.85%, suggesting room for improvement in generating returns on shareholder investments. The equity ratio of 23.94% indicates moderate financial stability.

Cash Flow

Free cash flow remains negative at -$1.139 billion, showing some improvement from previous years. Operating cash flow has improved significantly, reaching $2.891 billion from the previous year's $1.387 billion, indicating better cash generation from core operations. The free cash flow to net income ratio is negative, highlighting ongoing challenges in covering capital expenditures and dividends.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
13.47B	12.87B	12.46B	11.13B	10.79B
	Gross Profit
9.10B	8.22B	7.87B	7.69B	7.72B
	EBIT
2.38B	2.27B	2.62B	2.75B	2.16B
	EBITDA
4.10B	3.73B	3.45B	4.24B	3.39B
	Net Income Common Stockholders
978.00M	1.10B	406.00M	1.28B	1.08B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
111.00M	137.00M	160.00M	1.46B	1.73B
	Total Assets
52.04B	48.77B	46.11B	45.43B	44.46B
	Total Debt
24.02B	24.91B	21.65B	23.85B	24.48B
	Net Debt
23.91B	24.77B	21.49B	22.39B	22.74B
	Total Liabilities
38.32B	37.85B	35.47B	36.76B	37.23B
	Stockholders Equity
12.46B	10.44B	10.17B	8.68B	7.24B
Cash Flow		Free Cash Flow
-1.14B	-1.97B	-73.00M	366.00M	-1.23B
	Operating Cash Flow
2.89B	1.39B	2.68B	2.81B	1.42B
	Investing Cash Flow
-4.35B	-3.65B	-3.08B	-2.56B	-2.91B
	Financing Cash Flow
1.43B	2.24B	-912.00M	-542.00M	2.61B

FirstEnergy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FE, the sentiment is Positive. The current price of 41.04 is above the 20-day moving average (MA) of 39.69, above the 50-day MA of 39.89, and above the 200-day MA of 40.58, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 58.50 is Neutral, neither overbought nor oversold. The STOCH value of 80.19 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FE.

FirstEnergy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMS	78 Outperform	$21.99B	22.09	12.72%	2.91%	0.71%	11.07%
FE	70 Outperform	$23.73B	24.26	8.54%	4.13%	4.68%	-11.66%
EIX	70 Outperform	$22.03B	17.28	8.83%	5.65%	7.72%	6.49%
PPL	68 Neutral	$26.20B	29.60	6.33%	3.01%	1.80%	19.78%
CNP	66 Neutral	$24.26B	23.53	10.02%	2.27%	-0.61%	15.54%
ES	66 Neutral	$21.47B	25.76	5.56%	5.14%	-0.08%	―
Sector *	65 Neutral	$12.11B	15.89	6.20%	4.52%	5.53%	-8.93%

FirstEnergy Corporate Events

FirstEnergy Reports Strong 2024 Financial Results and Future Plans

FirstEnergy Corp. reported its financial results for the fourth quarter and full year of 2024, highlighting GAAP earnings of $1.70 per share and non-GAAP earnings of $2.63 per share, both within the company’s guidance range. The company invested $4.5 billion in 2024 to improve grid reliability, marking a 20% increase from 2023, and plans to extend its Energize365 capital investment program through 2029 with $28 billion in planned investments. Despite a decline in unregulated legacy investments, FirstEnergy’s core business fundamentals have improved, and the company has introduced a 2025 Core earnings guidance with a targeted 6-8% compound annual growth rate through the five-year planning period.