FirstEnergy
FE
$45.86
-0.04%
FirstEnergy Corp. is an investor-owned holding company that provides regulated electric utility services across five mid-Atlantic and Midwestern states, operating one of the nation's largest electric transmission systems. As a major player in the regulated electric utility industry, FirstEnergy distinguishes itself through its extensive transmission infrastructure and a diversified portfolio of distribution and generation assets. The current investor narrative centers on the company's strategic focus on grid modernization and reliability investments, which are expected to drive rate base growth and earnings expansion, while also navigating regulatory and operational challenges. Recent financial performance has shown revenue growth and improved profitability, but the stock has faced headwinds from broader market volatility and sector-specific concerns, making it a topic of debate among investors regarding its growth trajectory and valuation.…
FE
FirstEnergy
$45.86
Related headlines
Investment Opinion: Should I buy FE Today?
Based on the analysis, FirstEnergy is rated a Buy. The stock offers a compelling forward valuation with a PE of 15.6x, which is below the sector average, and the consensus analyst target of $53.17 implies a 15.9% upside. The company's revenue growth of 11.6% YoY and stable regulated operations provide a solid foundation for earnings growth. The high dividend yield of 3.93% adds to the total return potential, making it attractive for income-oriented investors.
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FE 12-Month Price Forecast
The AI assessment leans bullish due to the strong revenue growth, attractive forward valuation, and positive analyst sentiment. The low beta suggests the stock is less sensitive to market swings, making it a defensive choice. However, the high debt levels and earnings volatility temper confidence. If the company can sustain its growth trajectory and achieve the forecasted EPS, the stock is likely to appreciate toward the analyst target. Key factors to monitor include quarterly earnings, regulatory decisions, and interest rate movements. An upgrade to high confidence would occur if the company beats earnings estimates and raises guidance, while a downgrade would follow any negative regulatory news or a significant miss in earnings.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on FirstEnergy's 12-month outlook, with a consensus price target around $53.17 and implied upside of +15.9% versus the current price.
Average Target
$53.17
0 analysts
Implied Upside
+15.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$48 - $56
Analyst target range
The target price range spans from a low of $48.00 to a high of $56.00, with the average at $53.17. The high target of $56.00 implies a 22.1% upside, likely assuming successful execution of the company's growth plan, including rate base expansion and margin improvements. The low target of $48.00 suggests a more conservative scenario, possibly factoring in regulatory risks or higher interest costs. The spread between the low and high targets is $8.00, which is relatively wide, indicating moderate uncertainty about the stock's future performance. The recent upgrade from TD Cowen and Wolfe Research, along with the overall Buy consensus, suggests that analysts are becoming more optimistic, but the presence of Neutral ratings highlights lingering concerns about valuation and sector headwinds.
Bulls vs Bears: FE Investment Factors
FirstEnergy presents a mixed investment case. On the bullish side, the company is experiencing solid revenue growth, has a supportive analyst consensus, and offers a high dividend yield. The forward valuation is attractive, suggesting the market expects a significant earnings rebound. However, bearish factors include high debt levels, weak relative performance, and earnings volatility. The most critical tension is whether the company can execute its growth plan to achieve the forecasted EPS of $3.67, which would justify the current valuation and drive the stock toward the average target. If earnings fall short, the stock could remain range-bound or decline further. Currently, the evidence slightly favors the bulls due to the strong revenue growth and analyst optimism, but the risks are substantial.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 11.6% YoY to $4.202B, driven by regulated distribution and transmission segments. This growth is supported by ongoing grid modernization investments and rate base expansion.
- Attractive Forward Valuation: Forward PE of 15.6x is significantly below the trailing PE of 25.3x, implying the market expects strong earnings growth. Estimated EPS of $3.67 for next year supports this optimism.
- Analyst Consensus Buy: With 12 analysts, the consensus is Buy (mean rating 2.19) and the average target price of $53.17 implies ~15.9% upside from the current price of $45.88. Recent upgrades from TD Cowen and Wolfe Research add positive momentum.
- Stable Regulated Operations: The regulated distribution and transmission segments contributed $1.99B and $516M in Q1 2026, respectively, providing stable cash flows and reducing earnings volatility compared to unregulated peers.
Bearish
- High Debt Levels: Debt-to-equity ratio of 2.16 is elevated, and interest expenses of $272M in Q1 2026 weigh on profitability. Higher interest rates could further pressure earnings and valuation.
- Negative Relative Strength: The stock has underperformed the S&P 500 significantly over the past year (relative strength -13.2%) and over the past six months (-22.5%), indicating persistent selling pressure and weak momentum.
- Earnings Volatility: Quarterly EPS has been volatile, with Q4 2025 posting a loss of -$0.08 per share, while Q1 2026 rebounded to $0.70. This inconsistency raises concerns about earnings quality and predictability.
- High Valuation on Trailing Earnings: The trailing PE of 25.3x is above the typical utility sector average, suggesting the stock is not cheap on current earnings. The PEG ratio of 6.14 indicates that growth is not sufficient to justify the multiple.
FE Technical Analysis
FirstEnergy's stock is currently in a range-bound consolidation phase, with the price at $45.88 as of August 28, 2026, reflecting a 5.33% gain over the past year but a -10.32% decline over the last six months. The stock is trading at approximately 87.7% of its 52-week range (between $42.87 low and $52.34 high), indicating it is closer to the lower end of its yearly range, which may suggest a potential value opportunity or a sign of persistent weakness. The 52-week high of $52.34 was reached earlier in the period, and the current price is 12.3% below that level, while it is 7.0% above the 52-week low, positioning the stock in a middle-to-lower zone of its trading band.
Beta
0.45
0.45x market volatility
Max Drawdown
-15.6%
Largest decline past year
52-Week Range
$43-$52
Price range past year
Annual Return
+5.1%
Cumulative gain past year
| Period | FE Return | S&P 500 |
|---|---|---|
| 1m | -5.1% | +2.7% |
| 3m | +1.2% | +1.0% |
| 6m | -9.7% | +12.0% |
| 1y | +5.1% | +18.9% |
| ytd | +1.3% | +12.5% |
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FE Fundamental Analysis
FirstEnergy's revenue trajectory shows a mixed but generally positive trend, with the most recent quarter (Q1 2026) reporting revenue of $4.202 billion, a 11.61% year-over-year increase from $3.765 billion in Q1 2025. However, revenue has been volatile across quarters, with Q4 2025 at $3.797 billion and Q3 2025 at $4.148 billion, indicating a deceleration from the Q3 peak. The company's growth is primarily driven by its regulated distribution and transmission segments, which contributed $1.99 billion and $516 million respectively in the latest quarter, reflecting the stability of its regulated operations. The revenue growth is a positive signal for the investment case, but the quarterly fluctuations suggest that growth is not linear and may be subject to seasonal and regulatory factors.
Quarterly Revenue
$4.2B
2026-03
Revenue YoY Growth
+11.6%
YoY Comparison
Gross Margin
62.2%
Latest Quarter
Free Cash Flow
$1.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is FE Overvalued?
Given that FirstEnergy has positive net income, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 25.29x, while the forward PE is 15.56x, indicating that the market expects significant earnings growth in the coming year, as the forward multiple is substantially lower. This gap implies that analysts anticipate a strong earnings rebound, which is supported by the estimated EPS of $3.67 for the next fiscal year, up from the current trailing EPS of approximately $1.81. The PE ratio is a relevant metric for utilities, as they are typically valued on earnings, and the forward discount suggests optimism about future profitability.
PE
25.3x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 10x~30x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant for FirstEnergy. The company carries a high debt-to-equity ratio of 2.16, and interest expenses of $272 million in Q1 2026 consume a large portion of operating income. The payout ratio of 99.6% leaves little room for error, as nearly all earnings are distributed as dividends, limiting retained capital for growth or debt reduction. Additionally, the current ratio of 0.57 indicates potential liquidity concerns, though utilities often operate with lower current ratios due to stable cash flows. Earnings volatility is evident, with Q4 2025 reporting a net loss of -$49 million, highlighting the impact of non-cash charges and seasonal factors.
FAQ
The key risks include high financial leverage (debt-to-equity of 2.16), which increases sensitivity to interest rates and could strain cash flows. Regulatory risks are significant, as adverse rate case decisions could reduce allowed returns. Operational risks include potential outages or cost overruns in capital projects. Additionally, the stock has underperformed the market, with a relative strength of -13.2% over the past year, indicating possible sector-specific headwinds. The most severe risk is a combination of these factors leading to earnings below expectations, which could push the stock toward the 52-week low of $42.87.
The 12-month forecast for FirstEnergy is moderately bullish. The base case, with a 50% probability, sees the stock trading around $53.17, the average analyst target. The bull case, with a 30% probability, targets $56, while the bear case, with a 20% probability, could see the stock decline to $48 or lower. The most likely scenario is the base case, which assumes steady earnings growth and stable regulatory environment. Key factors to watch are the company's ability to achieve its EPS estimates and any changes in interest rates.
Based on the forward PE of 15.6x, FirstEnergy appears undervalued relative to its expected earnings growth. The trailing PE of 25.3x is higher, but the market is pricing in a significant earnings rebound. Compared to the utility sector average, the forward multiple is reasonable. The PEG ratio of 6.14 suggests that the growth rate is not sufficient to justify the trailing multiple, but the forward estimates indicate a more favorable valuation. Overall, the stock is fairly valued to slightly undervalued, with the market expecting improved profitability.
FirstEnergy is a good buy for investors seeking a defensive, income-generating utility stock. The stock offers a dividend yield of 3.93% and a forward PE of 15.6x, which is attractive relative to its growth prospects. Analyst consensus is Buy with an average target of $53.17, implying a 15.9% upside. However, the high debt levels and earnings volatility are risks to consider. It is particularly suitable for long-term investors who can tolerate some volatility and are focused on total return through dividends and moderate capital appreciation.
FirstEnergy is better suited for long-term investment due to its defensive nature, high dividend yield, and stable regulated operations. The stock's beta of 0.45 indicates lower volatility than the market, making it a good fit for conservative portfolios. Short-term trading may be challenging due to the stock's range-bound behavior and sensitivity to interest rate changes. A minimum holding period of 3-5 years is recommended to fully benefit from the dividend income and potential capital appreciation as the company executes its growth plan.