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FirstEnergy (FE)
NYSE:FE
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FirstEnergy (FE) AI Stock Analysis

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FE

FirstEnergy

(NYSE:FE)

Rating:70Outperform
Price Target:
$45.00
▲(8.70%Upside)
FirstEnergy's solid financial performance, strong earnings call outcomes, and attractive dividend yield contribute positively to the stock score. However, technical indicators suggest a neutral market sentiment, and regulatory challenges present moderate risks. Overall, the score reflects a stable investment outlook with notable income potential.
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.
Legal and Operational Developments
A new report finds PacifiCorp not responsible for the Santiam Canyon fire, which could be seen as a positive development for utilities.
Regulatory Environment
Staff's support of the Audit report is viewed positively, and adversarial intervenors have not significantly shifted the tone of overall testimony in the case.
Negative Factors
Earnings and Financial Performance
FE reported 4Q earnings and lowered their earnings forecast due to the removal of non-utility earnings and a reduction in the earnings contribution at the utilities.
Operational and Strategic Concerns
FirstEnergy is exploring a Signal Peak sale while facing earnings pressure, which complicates achieving long-term growth targets.
Regulatory Challenges
Utilities' requests for higher Return on Equity are not expected to be granted as filed, which might not attract new investors.

FirstEnergy (FE) vs. SPDR S&P 500 ETF (SPY)

FirstEnergy Business Overview & Revenue Model

Company DescriptionFirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. It operates through its subsidiaries and affiliates in the United States, primarily within the electric utility sector. The company is involved in the generation, transmission, and distribution of electricity, serving customers in the Midwest and Mid-Atlantic regions. FirstEnergy's core services include providing reliable electric service to residential, commercial, and industrial customers across its service territories.
How the Company Makes MoneyFirstEnergy makes money through several key revenue streams. The primary source of revenue is the sale of electricity to its customer base, which includes residential, commercial, and industrial users. The company generates electricity through its fleet of generating plants and purchases it from the wholesale market to meet customer demand. Additionally, FirstEnergy earns revenue from the transmission of electricity across its network of high-voltage lines, charging other utilities for the use of its infrastructure. The company also engages in regulated distribution activities, where it charges customers based on regulated tariffs approved by state utility commissions. These tariffs are designed to cover the costs of service and provide a reasonable return on investment. Significant partnerships with other utilities and energy providers, as well as strategic asset management, contribute to FirstEnergy's financial performance.

FirstEnergy Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: -1.73%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, robust capital investments, and positive regulatory developments. However, there are challenges such as industrial demand decline and regulatory uncertainties in Ohio. The company's proactive measures and strategic focus on growth and efficiency are promising.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
GAAP earnings of 62¢ per share, up from 44¢ per share in 2024. Core earnings improved to 67¢ per share from 49¢ in the same period last year, a 37% increase.
Robust Capital Investment
Invested over $1 billion in Q1 2025, a 15% increase over the previous year, with a plan to deploy $5 billion of customer-focused investments in 2025, representing an 11% increase compared to 2024.
Earnings Guidance and Dividend Increase
Reaffirmed 2025 core EPS guidance range of $2.40 to $2.60 per share, targeting the top half of that range. Approved a 4.7% increase in quarterly dividend, totaling an annual rate of $1.78 per share.
Regulatory and Legislative Progress
Settlement reached in New Jersey's infrastructure investment program. Positive momentum in Ohio with active legislative discussions on house and senate bills.
Data Center Demand
Received 15 large load study requests representing approximately nine gigawatts of load, with significant activity in Pennsylvania and Ohio.
Negative Updates
Industrial Demand Decline
Total industrial customer demand decreased by 3% in Q1 2025, primarily due to a slowdown in the steel sector tied to automotive demand.
Regulatory Uncertainties in Ohio
Ongoing uncertainty around Ohio's base rate case and the impact of legislative changes, with hearings scheduled to begin on May 5.
Capacity Auction Price Concerns
Concerns over high-priced capacity auctions in New Jersey and Pennsylvania, which do not bring new capacity to the market, impacting customers.
Company Guidance
During FirstEnergy Corp's Q1 2025 earnings call, the company reaffirmed its 2025 core EPS guidance range of $2.40 to $2.60 per share, targeting the upper half of that range. The company reported GAAP earnings of 62¢ per share and core earnings of 67¢, both reflecting significant improvements over the previous year, primarily driven by strong execution, robust capital investments, and financial discipline. FirstEnergy's investment program is on track, with over $1 billion invested in the first quarter through its Energize 365 capital program, a 15% increase compared to last year. The company plans to deploy $5 billion in customer-focused investments this year, an 11% increase from 2024, and maintains a long-term $28 billion investment plan through 2029. Additionally, the board approved a 4.7% increase in the quarterly dividend, representing an 11% increase in annual declared dividends since 2023. FirstEnergy also highlighted progress in Ohio's base rate case and legislative activities, as well as growth opportunities in data centers and transmission investments.

FirstEnergy Financial Statement Overview

Summary
FirstEnergy demonstrates solid financial performance with consistent revenue growth and robust gross margins, albeit with some pressure on net profitability. The balance sheet shows moderate leverage and a reasonable ROE, while cash flow improvements indicate a positive trajectory. The company's financials reflect stability with opportunities for enhancing profitability and cash flow.
Income Statement
78
Positive
FirstEnergy has shown steady revenue growth with a 3.55% increase in the latest TTM period compared to the previous year. The gross profit margin stands at a robust 56.77%, indicating efficient cost management. However, the net profit margin is relatively lower at 8.16%, suggesting room for improving profitability. The EBIT and EBITDA margins are at 18.04% and 30.54% respectively, reflecting solid operational efficiency.
Balance Sheet
65
Positive
The company's debt-to-equity ratio is 1.84, which indicates a moderate level of leverage, typical for the regulated electric industry. The return on equity (ROE) is 9.06%, showing a reasonable return for shareholders, though there's potential for improvement. The equity ratio stands at 23.81%, signifying a balanced approach to asset financing.
Cash Flow
70
Positive
FirstEnergy's free cash flow has improved significantly, turning positive at $328 million in the TTM, from a negative position previously. The operating cash flow to net income ratio of 3.13 suggests strong cash generation relative to net income. This indicates a healthy cash flow position, though there is room for enhancing free cash flow sustainability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue13.95B13.47B12.87B12.46B11.13B10.79B
Gross Profit7.92B9.10B8.22B7.87B7.69B7.72B
EBITDA4.27B4.10B3.73B3.45B4.24B3.39B
Net Income1.08B978.00M1.10B406.00M1.28B1.08B
Balance Sheet
Total Assets52.77B52.04B48.77B46.11B45.43B44.46B
Cash, Cash Equivalents and Short-Term Investments132.00M111.00M137.00M160.00M1.46B1.73B
Total Debt24.79B24.02B24.91B21.65B23.85B24.48B
Total Liabilities38.91B38.32B37.85B35.47B36.76B37.23B
Stockholders Equity12.57B12.46B10.44B10.17B8.68B7.24B
Cash Flow
Free Cash Flow-677.00M-1.14B-1.97B-73.00M366.00M-1.23B
Operating Cash Flow3.57B2.89B1.39B2.68B2.81B1.42B
Investing Cash Flow-4.58B-4.35B-3.65B-3.08B-2.56B-2.91B
Financing Cash Flow260.00M1.43B2.24B-912.00M-542.00M2.61B

FirstEnergy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price41.40
Price Trends
50DMA
40.82
Positive
100DMA
40.51
Positive
200DMA
40.36
Positive
Market Momentum
MACD
0.19
Negative
RSI
61.37
Neutral
STOCH
77.23
Neutral
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 41.4 is above the 20-day moving average (MA) of 40.43, above the 50-day MA of 40.82, and above the 200-day MA of 40.36, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 61.37 is Neutral, neither overbought nor oversold. The STOCH value of 77.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FE.

FirstEnergy Risk Analysis

FirstEnergy disclosed 47 risk factors in its most recent earnings report. FirstEnergy reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

FirstEnergy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$26.98B27.257.00%2.90%5.62%30.02%
72
Outperform
$21.80B21.5712.53%2.90%5.87%3.59%
71
Outperform
$24.40B28.655.63%4.42%10.82%
70
Outperform
$23.89B21.918.69%4.15%7.92%1.54%
67
Neutral
$24.23B24.968.76%2.25%4.84%-11.24%
67
Neutral
$19.78B7.4217.93%6.34%5.36%209.92%
67
Neutral
$16.88B17.114.48%3.27%4.75%6.12%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FE
FirstEnergy
41.40
2.12
5.40%
CNP
Centerpoint Energy
37.84
9.26
32.40%
CMS
CMS Energy
72.89
11.83
19.37%
EIX
Edison International
51.42
-23.20
-31.09%
ES
Eversource Energy
66.41
4.89
7.95%
PPL
PPL
36.58
8.06
28.26%

FirstEnergy Corporate Events

Business Operations and StrategyFinancial Disclosures
FirstEnergy Updates Incentive Program Metrics to Core EPS
Neutral
Jun 20, 2025

On June 17, 2025, FirstEnergy‘s Board of Directors approved a modification to the key performance indicators for its Long-term Incentive Compensation Program, replacing Operating EPS with Core EPS for performance periods in 2025 and 2026. This strategic shift aligns with the company’s transition to reporting based on Core EPS, reflecting its focus on regulated operations and providing consistent performance metrics for management incentives.

The most recent analyst rating on (FE) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on FirstEnergy stock, see the FE Stock Forecast page.

Private Placements and Financing
FirstEnergy Completes $2.5 Billion Convertible Note Offering
Neutral
Jun 12, 2025

On June 12, 2025, FirstEnergy Corp. completed a $2.5 billion convertible note offering, issuing $1.35 billion in 3.625% Convertible Senior Notes due 2029 and $1.15 billion in 3.875% Convertible Senior Notes due 2031. The company plans to use approximately $1.2 billion of the net proceeds to repurchase a portion of its outstanding 4.00% convertible senior notes due 2026. This strategic financial maneuver is expected to impact the market price of FirstEnergy’s common stock and the 2026 Notes, as holders may adjust their positions and employ convertible arbitrage strategies, potentially affecting the effective conversion price of the new Notes.

The most recent analyst rating on (FE) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on FirstEnergy stock, see the FE Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
FirstEnergy Announces $2.15 Billion Notes Offering
Neutral
Jun 10, 2025

On June 9, 2025, FirstEnergy Corp. announced the pricing of its $2.15 billion convertible senior notes offering, with $1.15 billion due in 2029 and $1 billion due in 2031, in a private placement. The proceeds, expected to be approximately $2.13 billion, will be used for repurchasing existing notes, refinancing debt, and general corporate purposes, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (FE) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on FirstEnergy stock, see the FE Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
FirstEnergy Announces Convertible Senior Notes Offering
Neutral
Jun 9, 2025

On June 9, 2025, FirstEnergy Corp. announced its intention to offer $950 million in Convertible Senior Notes due 2029 and $850 million due 2031, subject to market conditions. The proceeds from this private placement will be used for repurchasing existing notes, refinancing debt, and other corporate purposes, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (FE) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on FirstEnergy stock, see the FE Stock Forecast page.

Executive/Board ChangesShareholder Meetings
FirstEnergy Confirms Board and Auditor at Annual Meeting
Neutral
May 21, 2025

FirstEnergy Corp. held its Annual Meeting of Shareholders virtually on May 21, 2025, where several key decisions were made. The election of board members was confirmed, the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025 was ratified, and executive compensation was approved. However, a shareholder proposal for a report on lobbying activities was not approved.

The most recent analyst rating on (FE) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on FirstEnergy stock, see the FE Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 11, 2025