FirstEnergy Corp. (FE), headquartered in Akron, Ohio, generates, transmits, and distributes electricity as well as offers exploration, production, and distribution of natural gas. Valued at $24.5 billion by market cap, the company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities and provides energy management and other energy-related services.
Shares of this electric utility have underperformed the broader market considerably over the past year. FE has gained 17.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.1%. In 2024 alone, FE’s stock rose 16.1%, compared to SPX’s 16.5% rise on a YTD basis.
Narrowing the focus, FE has also marginally lagged behind the Vanguard Utilities Index Fund ETF (VPU). The exchange-traded fund has gained about 17.6% over the past year.
On Jul. 30, FE shares closed up marginally after reporting its Q2 results. Its adjusted EPS of $0.56 matched Wall Street expectations, but its revenue was $3.3 billion, missing Wall Street forecasts of $3.5 billion. For Q3, FE expects adjusted EPS to be between $0.85 and $0.95. The company also affirmed its full-year adjusted EPS to be between $2.61 and $2.81.
For the current fiscal year, ending in December, analysts expect FE’s EPS to grow 5.5% to $2.70 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 15 analysts covering FE stock, the consensus is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, two “Moderate Buys,” six “Holds,” and one “Moderate Sell.”
On Aug. 2, Bank of America Securities analyst Paul Cole reiterated a “Sell” rating on FE with a price target of $42, implying a potential downside of 1.3% from current levels.
The mean price target of $43.33 represents a 1.8% premium to FE’s current price levels. The Street-high price target of $48 suggests an upside potential of 12.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
