FirstEnergy (FE) AI Stock Analysis

• Market Cap: $25.10B
• Dividend Yield: 4%
• Average Volume (3M): 3.87M
• Price to Earnings (P/E): 19.2
• Beta (1Y): 0.13
• Revenue Growth: 6.44%
• EPS Growth: 49.07%
• Country: US
• Employees: 12,294
• Sector: Utilities
• Sector Strength: 62
• Industry: Regulated Electric
• EPS (TTM): 0.52
• Shares Outstanding: 577,403,930
• 10 Day Avg. Volume: 3,458,784
• 30 Day Avg. Volume: 3,866,325
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.98
• Enterprise Value/Revenue: 3.54
• Enterprise Value/Gross Profit: 5.26
• Enterprise Value/Ebitda: 10.98
• 1Y Price Target: $46.00
• Price Target Upside: 5.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 73 Outperform
• Price Target: $48.00 ▲(10.42% Upside)

FirstEnergy's overall stock score is driven by strong financial performance and strategic investments, as highlighted in the earnings call. The company's valuation is reasonable, and technical indicators suggest a moderate upward trend. However, high leverage and regulatory uncertainties pose risks.

Positive Factors

Earnings

The EPS trajectory for FirstEnergy is poised to improve, indicating a positive outlook for the company's earnings.

Growth Potential

There is clear pressure higher on the capital plan from transmission and generation that can drive the rate base CAGR to 10%.

Valuation

Management's plan is undervalued at an 11% P/E discount while successful execution could lead to consensus earnings revisions and multiple re-rate through 2026.

Negative Factors

Earnings Forecast

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.

Investor Confidence

There are concerns about the durability of the wildfire fund under AB 1054, which could affect investor confidence.

Regulatory Challenges

Ohio legislation feedback is cautious for FirstEnergy.

FirstEnergy Business Overview & Revenue Model

Company Description

FirstEnergy Corp. (FE) is a leading electric utility company headquartered in Akron, Ohio. It operates through various subsidiaries that provide regulated electric service to approximately 6 million customers in the Midwest and Mid-Atlantic regions of the United States. The company is involved in the generation, transmission, and distribution of electricity, with a focus on delivering reliable energy solutions. FirstEnergy’s core services include the generation of electricity from diverse sources, including nuclear, coal, natural gas, and renewable energy, along with the operation of a vast transmission network and a commitment to energy efficiency and customer service.

How the Company Makes Money

FirstEnergy generates revenue primarily through the sale of electricity to residential, commercial, and industrial customers. Its revenue model is largely based on regulated pricing, where state utility commissions approve rates that the company can charge for electricity delivery. Key revenue streams include transmission and distribution charges, which are collected from customers along with the cost of electricity supplied. Additionally, FirstEnergy earns revenue from ancillary services related to the management of the electric grid and from energy efficiency programs. Partnerships with state governments and regulatory bodies also play a significant role in shaping its earnings, as they influence rate structures and investment in infrastructure improvements that can enhance operational efficiency and service reliability.

FirstEnergy Financial Statement Overview

Summary

FirstEnergy demonstrates solid financial performance with consistent revenue growth and improved profitability. The balance sheet shows high leverage, typical for the industry, but maintains adequate equity levels. Cash flow has improved, turning positive, though it remains a concern relative to net income.

Income Statement

FirstEnergy shows a consistent revenue growth trajectory with a TTM revenue growth rate of 4.29% compared to the previous year. The gross profit margin is robust at 67.34%, and the net profit margin improved to 9.66% TTM, indicating enhanced profitability. However, the EBITDA margin slightly decreased to 29.14% TTM, which could be an area to monitor.

Balance Sheet

FirstEnergy's balance sheet indicates a high debt-to-equity ratio of 1.98, suggesting significant leverage. The equity ratio is stable at 23.70%, and ROE has improved to 10.57% TTM, reflecting better returns on equity. Despite high leverage, the company maintains adequate equity levels.

Cash Flow

Cash flow analysis reveals a positive shift in free cash flow, which moved from negative to positive in the TTM period. The operating cash flow to net income ratio is 2.61, showing strong cash generation. However, the free cash flow to net income ratio is lower at 0.17, indicating limited free cash relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.05B	13.47B	12.87B	12.46B	11.13B	10.79B
Gross Profit	9.46B	9.10B	8.22B	7.87B	7.69B	7.72B
EBITDA	4.54B	4.10B	3.95B	3.77B	4.29B	3.39B
Net Income	1.31B	978.00M	1.10B	406.00M	1.28B	1.08B
Balance Sheet
Total Assets	54.23B	52.04B	48.77B	46.11B	45.43B	44.46B
Cash, Cash Equivalents and Short-Term Investments	569.00M	111.00M	137.00M	160.00M	1.46B	1.73B
Total Debt	25.82B	24.02B	24.91B	21.66B	23.85B	24.48B
Total Liabilities	40.06B	38.32B	37.85B	35.47B	36.76B	37.23B
Stockholders Equity	12.85B	12.46B	10.44B	10.17B	8.68B	7.24B
Cash Flow
Free Cash Flow	235.00M	-1.14B	-1.97B	-73.00M	366.00M	-1.23B
Operating Cash Flow	3.54B	2.89B	1.39B	2.68B	2.81B	1.42B
Investing Cash Flow	-4.89B	-4.35B	-3.65B	-3.08B	-2.56B	-2.91B
Financing Cash Flow	1.86B	1.43B	2.24B	-912.00M	-542.00M	2.61B

FirstEnergy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 43.47 is below the 20-day moving average (MA) of 43.52, above the 50-day MA of 41.88, and above the 200-day MA of 40.26, indicating a neutral trend. The MACD of 0.40 indicates Positive momentum. The RSI at 58.01 is Neutral, neither overbought nor oversold. The STOCH value of 29.10 is Neutral, 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
AEE	75 Outperform	$27.28B	21.95	10.29%	2.74%	17.32%	3.35%
FE	73 Outperform	$25.10B	19.19	10.33%	4.00%	6.44%	49.07%
PPL	71 Outperform	$26.99B	27.23	6.96%	2.90%	6.62%	17.35%
DTE	68 Neutral	$28.32B	19.49	12.61%	3.14%	14.35%	3.62%
Sector *	66 Neutral	$17.25B	17.87	5.54%	3.65%	6.63%	11.55%
CMS	66 Neutral	$21.41B	21.11	12.48%	2.99%	8.25%	4.37%
ES	66 Neutral	$23.64B	27.42	5.63%	4.63%	14.44%	―

FirstEnergy Corporate Events

FirstEnergy Reports Strong Q2 2025 Financial Results

FirstEnergy Corp. reported strong financial results for the second quarter of 2025, with GAAP earnings of $0.46 per share and Core Earnings of $0.52 per share, surpassing expectations. The company affirmed its full-year 2025 Core Earnings guidance and projected a 6-8% annual growth rate through 2029. Key drivers included new base rates in Pennsylvania and growth in transmission rate base, although milder temperatures slightly reduced customer demand. FirstEnergy’s strategic investments, including a $2.5 billion deployment in the first half of 2025, are part of its broader $28 billion Energize365 program, positioning the company for stable growth and financial strength.

FirstEnergy Updates Incentive Program Metrics to Core EPS

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.

FirstEnergy Completes $2.5 Billion Convertible Note Offering

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.

FirstEnergy Announces $2.15 Billion Notes Offering

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.

FirstEnergy Announces Convertible Senior Notes Offering

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.

FirstEnergy Confirms Board and Auditor at Annual Meeting

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.