FirstEnergy Corp Faces Market Challenges Amid Growth Investments
Akron, Ohio’s FirstEnergy Corp. (FE), a significant player in the energy sector, generates, transmits, and distributes electricity across the United States. With a market capitalization nearing $23 billion, the company operates through Regulated Distribution and Regulated Transmission segments.
Falling into the large-cap stock category, companies valued at $10 billion or more, FirstEnergy reflects substantial size and influence within the regulated electricity market. The company operates a diverse array of power-generating facilities, including coal, nuclear, hydroelectric, wind, and solar plants.
Recent Stock Performance
FirstEnergy has experienced a decline of 11.4% from its 52-week high of $44.97, reached on Sept. 5. Additionally, FE stock decreased by 8.8% over the past three months, notably trailing behind the Nasdaq Composite’s ($NASX) impressive 14.1% gains during the same period.
The company’s long-term performance has also faltered. Year-to-date, FE stock is up only 8.7%, while it gained 7.7% over the last 52 weeks, well below the NASX’s remarkable 34% gain in 2024 and 35.7% over the past year.
This downturn is confirmed by FE’s trading patterns; the stock traded above its 200-day moving average since early March but recently fell below it within the last two weeks. Additionally, it has remained beneath its 50-day moving average since late October.
Quarterly Earnings and Future Prospects
Following the release of its Q3 results on Oct. 29, FirstEnergy’s stock dropped over 1.5%. The company has encountered several unforeseen challenges this year and fell short of Wall Street’s earnings and revenue expectations. Although total revenues reached $3.7 billion, this missed analysts’ forecasts by 6.4% despite being a 6.9% increase from the same quarter last year. Furthermore, adjusted earnings per share declined 3.4% year-over-year to $0.85, missing estimates by 6.6%.
On a more encouraging note, FirstEnergy has demonstrated strong cash flow generation and continues to invest for long-term growth. The firm’s capital investment over the last three quarters has surged 20.7% year-over-year to $2.7 billion, highlighting its commitment to expansion.
Comparative Performance and Analyst Ratings
In contrast to FirstEnergy, Entergy Corporation (ETR) has achieved gains of 47.9% in 2024 and 48.4% over the past year, highlighting FirstEnergy’s struggles within its competitive landscape.
Of the 17 analysts tracking FE stock, the consensus rating is a “Moderate Buy.” The average price target of $47.38 indicates an 18.9% potential upside from current price levels.
On the date of publication, Aditya Sarawgi did not hold any direct or indirect positions in any of the mentioned securities. All information provided in this article is for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.
The views expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
