In a recent update, Wells Fargo's analyst Neil Kalton has increased the price target for FirstEnergy (FE, Financial) to $44, up from the previous $41, while maintaining an Equal Weight rating on the stock. This adjustment follows FirstEnergy's comparatively stable first-quarter update, which was a departure from the prior quarter's turbulent results featuring a downward adjustment in EPS guidance.
Currently, attention is centered on Ohio, where FirstEnergy is engaged in a significant base rate case. The outcome of this case, along with ongoing energy legislation developments in the state, are crucial factors likely to influence the company's near-term performance according to Wells Fargo's analysis.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for FirstEnergy Corp (FE, Financial) is $43.88 with a high estimate of $47.00 and a low estimate of $39.00. The average target implies an upside of 3.78% from the current price of $42.28. More detailed estimate data can be found on the FirstEnergy Corp (FE) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, FirstEnergy Corp's (FE, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for FirstEnergy Corp (FE, Financial) in one year is $44.05, suggesting a upside of 4.19% from the current price of $42.28. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the FirstEnergy Corp (FE) Summary page.
FE Key Business Developments
Release Date: February 27, 2025
- GAAP Earnings: $1.70 per share for 2024.
- Operating Earnings: $2.63 per share, within the forecasted guidance range.
- Net Annual Revenue Increase: Approximately $450 million from approved rate cases in Maryland, West Virginia, New Jersey, and Pennsylvania.
- Capital Investments: $4.5 billion in 2024, surpassing the original plan by 5% and a 20% increase compared to 2023.
- Dividend Declarations: $1.70 per share in 2024, an increase of over 6% from 2023.
- Core Earnings Growth: 33% growth from 2022 to 2024.
- 2025 Core Earnings Guidance: $2.40 to $2.60 per share.
- 2025 Capital Investment Plan: $5 billion, an 11% increase over 2024.
- Rate Base Growth: 9% compounded annual growth rate through 2029.
- Return on Equity (ROE): 9.4% on a rate base of $25.9 billion for 2024.
- Debt Financing Plan for 2025: Eight transactions approximating $3.6 billion.
- Dividend Guidance for 2025: Anticipated annual declarations totaling $1.78 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FirstEnergy Corp (FE, Financial) achieved a significant de-risking of its business from financial and regulatory perspectives in 2024.
- The company delivered 2024 GAAP earnings of $1.70 per share and operating earnings of $2.63 per share, within the forecasted guidance range.
- FirstEnergy Corp (FE) completed rate reviews in four of its five states, de-risking 83% of its rate base.
- The company successfully closed a transformative transaction, improving its balance sheet and achieving investment-grade status across all subsidiaries.
- FirstEnergy Corp (FE) introduced core earnings to better reflect the performance of its regulated utilities, showing a 33% growth from 2022 to 2024.
Negative Points
- FirstEnergy Corp (FE) faced headwinds from lower sales volumes due to mild weather and storm activity that did not meet regulatory deferral requirements.
- Ohio revenues were below plan due to the ESP V order, impacting financial performance.
- Higher-than-anticipated financing costs, including significantly higher interest rates, affected the 2025 guidance.
- The removal of a 50 basis point incentive from ATSI transmission rates and Ohio DCR revenue caps posed challenges.
- The company experienced volatility in non-core earnings from pension and Signal Peak mine, leading to a shift in reporting to core earnings.
