Last Updated: 18 Sep 2024
Executive Summary
FirstEnergy Corporation (FE) is a leading electric utility company in the United States. The company has a market capitalization of $25.5 billion and generates consistent revenue and earnings growth. FE's financial performance is supported by its strong operating margins, return on assets, and return on equity. The company also has a stable dividend yield and a reasonable forward PE ratio.
Company Overview
FirstEnergy Corp is an electric utility headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the distribution, transmission, and generation of electricity, as well as energy management and other energy-related services. The company serves approximately 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, and Maryland.
Fundamental Analysis
Revenue: FE's revenue has grown steadily over the past five years, from $11.5 billion in 2018 to $13 billion in 2023. The company's revenue growth is driven by increasing demand for electricity and its expansion into new markets.
Earnings: FE's earnings per share (EPS) have also grown steadily over the past five years, from $1.20 in 2018 to $1.56 in 2023. The company's earnings growth is supported by its strong operating margins and its ability to control costs.
Profitability: FE's profit margins are among the highest in the industry. The company's gross profit margin is 6.3% and its operating margin is 17%. FE's profitability is supported by its efficient operations and its ability to pass on costs to customers.
Return on Equity (ROE): FE's ROE is 8.08%, which is above the industry average. The company's ROE is supported by its strong earnings growth and its efficient use of capital.
Dividend: FE pays a quarterly dividend of $0.4075 per share, which equates to a dividend yield of 3.89%. The company has a history of increasing its dividend, and its dividend yield is attractive compared to other utilities.
Technical Analysis
Trend: FE's stock price has been in a downtrend since early 2023. The stock price is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock price has support at $42 and resistance at $45.
Momentum: FE's stock price has negative momentum, as indicated by the MACD and RSI indicators.
Short Term Outlook
In the short term, FE's stock price is likely to continue to trade in a range between $42 and $45. The stock price may experience some volatility due to the company's earnings report and the overall market conditions.
Long Term Outlook
In the long term, FE's stock price is likely to continue to grow. The company has a strong business model, a growing customer base, and a track record of consistent earnings growth. FE's stock price is also supported by its attractive dividend yield.
Analyst Recommendations
Analysts have a consensus rating of "Hold" on FE's stock. The average analyst target price is $45.47, which represents an upside potential of 4.1% from the current stock price.
Overall
FirstEnergy Corporation is a solid investment for investors seeking a combination of income and growth. The company has a strong business model, a growing customer base, and a track record of consistent earnings growth. FE's stock price is also supported by its attractive dividend yield.
