Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
FirstEnergy Corp. (FE): Regulatory Wins and Transmission Expansion – Can Capital Plans and Efficiency Gains Bridge the Growth Gap?
FirstEnergy’s Q3 2024 results showcased resilience, with revenue of $3.73B exceeding expectations by $20.91M, though operating EPS of $0.85 missed by $0.05 due to $30M in storm-related costs and higher operational expenses. GAAP EPS of $0.73 fell short by $0.19, reflecting transient challenges like storm costs and one-time adjustments. The regulated business model remained durable, with distribution earnings supported by rate base growth and normalized demand, while the transmission segment posted 10% YoY rate base growth despite dilution from the FET stake sale. The updated $4.6B CapEx plan for 2024 and the broader $26B five-year roadmap through 2028 underpin FirstEnergy’s long-term strategy, targeting a 9% average annual rate base growth and a 6%-8% EPS CAGR. Constructive regulatory outcomes, including the Pennsylvania rate case settlement, enhance earnings recovery and investment visibility. Challenges include storm cost recovery delays, dilution from asset sales, and uncertainties in Ohio’s regulatory framework, but these are balanced by strong liquidity ($6B), improved credit ratings, and robust transmission expansion opportunities through PJM’s RTEP. As FirstEnergy advances its modernization efforts and pursues efficiency gains, can it effectively execute its $26B capital plan and achieve regulatory clarity to sustain long-term earnings growth amidst evolving challenges?
