This is an old version of FE from 13 days ago (Oct 31, 2026).See the latest version
FE
- Price
- $46.91
- Discount category
- Close to intrinsic value
- Next earnings
- Jan 27, 2027
- Next earnings is estimate
- Yes
- Company name
- FirstEnergy
- Sector
- Electric utilities
- About
- FirstEnergy owns regulated electric utilities that serve customers in Ohio, Pennsylvania, New Jersey, West Virginia and Maryland. It reports three segments. Distribution serves about 4.3 million customers in Ohio and Pennsylvania. Integrated serves about 2 million customers in New Jersey, West Virginia and Maryland, and it includes the power plants of Mon Power in West Virginia. Stand-Alone Transmission covers its transmission companies, held through FirstEnergy Transmission (FET), in which a Brookfield fund owns 49.9%. State commissions set its distribution rates, and FERC sets its transmission rates. Its Energize365 plan invests $36 billion from 2026 to 2030, about 30% more than the earlier plan.
- Thesis
- The market prices FirstEnergy for its high debt and for the legal and regulatory cost of the Ohio bribery scandal of 2020. FirstEnergy still operates under a Deferred Prosecution Agreement from July 2021, and Ohio regulators ordered it in January 2026 to pay customers about $275 million in restitution and refunds. Total debt was about $29.0 billion at June 30, 2026, and the $36 billion building plan needs much more debt. FirstEnergy also plans to fund up to 35% of new investments, such as the Maidsville Energy Center, with equity or equity-like securities, which can dilute shareholders. For the gap to close, three things must be true. FirstEnergy must reach its 2026 Core Earnings guidance of $2.62 to $2.82 per share, which it now expects at or slightly above the midpoint, and keep growth near the top of 6% to 8% a year through 2030. Ohio regulators must approve a fair three-year rate plan that starts in July 2027. New data center demand, now 7.9 GW contracted, must turn into transmission and generation investment. The first steps are a West Virginia order on the Maidsville Energy Center, expected in Q4 2026, and a transmission plan at least 25% larger, expected in early 2027. The Ohio rate plan decision, expected by mid-2027, is the main test. If these checks pass, the gap can close over the next two to four quarters. The main reason it may not close is a new legal or regulatory cost from the Ohio scandal.
- Risks
- The Ohio bribery scandal still brings legal costs and lawsuits, including a securities class action. FirstEnergy says that it cannot yet estimate the loss from some of these cases. FirstEnergy must fund a $36 billion building plan with large amounts of new debt. Total debt rose to about $29.0 billion at June 30, 2026, from $26.6 billion at December 31, 2025. FirstEnergy plans to fund up to 35% of new investments with equity or equity-like securities, which can dilute shareholders. A credit rating cut would raise its borrowing costs. The Ohio three-year rate plan and other state cases decide most of its earnings growth. Low allowed returns or rejected costs would slow growth. Much of the new demand depends on data centers. If projects are delayed or cancelled, the added transmission and generation investment can be smaller than expected.
- Balance sheet
- Cash: $63M Debt: $29.0B Net debt: $28.9B Debt due within 12 months: $1.9B FirstEnergy funds itself with long-term debt at the holding company, at FirstEnergy Transmission and at each utility, and with short-term borrowings under its credit facilities. At June 30, 2026, long-term debt and other long-term obligations were $27.10 billion, currently payable long-term debt was $505 million and short-term borrowings were $1.38 billion, so total debt was about $29.0 billion, up from $26.6 billion at December 31, 2025. Cash was $63 million. In the first half of 2026, FirstEnergy issued $2.08 billion of long-term debt, repaid $694 million and added $1.05 billion of short-term borrowings, while capital investments were $2.60 billion. Operating cash flow fell to $1.14 billion from $1.72 billion, partly because of $266 million of Ohio restitution and refunds. It has eight senior unsecured revolving credit facilities, last amended on October 27, 2025. On October 27, 2026, FirstEnergy said that it had completed its 2026 subsidiary debt financing plan of $2.6 billion. As of Jun 30, 2026.
- Checkpoints
- Oct 27, 2026: Q3 2026 results: guidance and data center demand. Passed. Watch: FirstEnergy keeps its 2026 Core Earnings guidance of $2.62 to $2.82 per share and reports more contracted data center demand passes; a lower guidance or new scandal costs fail. Outcome: FirstEnergy kept its 2026 guidance and now expects results at or slightly above the midpoint, and contracted data center demand rose to 7.9 GW from 6.4 GW in Q2 2026. Q4 2026 (estimate): West Virginia order on the Maidsville Energy Center. Pending. Watch: An order in Q4 2026 that approves the 1.2 GW gas plant passes; a rejection or a delay into the second half of 2027 fails. Jan 27, 2027 (estimate): Q4 2026 results and the 2027 to 2031 plan. Pending. Watch: 2026 Core EPS at or above the $2.72 midpoint and a 2027 to 2031 plan with at least 25% more transmission investment pass; Core EPS below the midpoint or a smaller plan fails. Q2 2027 (estimate): Ohio three-year rate plan decision. Pending. Watch: An order that grants a large part of the requested increases with a return on equity near 10% passes; a low return or a large cut in the request fails.
- Recent events
- Oct 27, 2026: FirstEnergy reported Q3 2026 results. GAAP EPS was $0.96, and Core EPS was $0.98, up from $0.83 a year earlier. Core EPS for the first nine months rose 9% to $2.20. FirstEnergy kept its 2026 Core EPS guidance of $2.62 to $2.82 and now expects results at or slightly above the midpoint. Contracted data center demand rose to 7.9 GW, nearly double the level at the end of 2025. FirstEnergy expects to make its $19 billion transmission plan at least 25% larger when it rolls the plan forward to 2027 to 2031. It reserved turbines from Siemens for the Maidsville Energy Center, with delivery in 2030, and it expects the West Virginia order on the plant in Q4 2026. Sep 4, 2026: FirstEnergy's Maryland utility filed a base rate case. The Maryland commission must decide by April 2, 2027, for new rates from April 3, 2027. Aug 6, 2026: FirstEnergy's New Jersey utility filed a base rate case. FirstEnergy expects new rates in Q2 2027, but the effect on customer bills is delayed until 2028. Jul 31, 2026: The West Virginia Public Service Commission approved, as filed, a cumulative revenue increase of $76 million for FirstEnergy's West Virginia utilities. The rate increases start on August 1, 2026 and June 1, 2027, and no new base rate increase can start before April 2028. Jul 28, 2026: FirstEnergy reported Q2 2026 results. GAAP and Core Earnings were $0.50 per share, in line with its plan. It kept its 2026 Core Earnings guidance of $2.62 to $2.82 per share and its growth target near the top of 6% to 8% a year from 2026 to 2030. Contracted data center demand rose to 6.4 GW, and total data center demand, contracted and pipeline, rose 30% from Q1. Jun 1, 2026: In its spring investor update, FirstEnergy said that it is advancing contracts for equipment, construction and gas supply for the 1.2 GW Maidsville Energy Center, a gas plant in West Virginia. It said that data center developers show strong interest in more generation in West Virginia. May 22, 2026: The Ohio utilities filed a three-year rate plan for July 2027 to June 2030. It asks for base distribution revenue increases of about $254 million in the first year, $59 million in the second year and $80 million in the third year, with a return on equity of 10.2% and about 53% equity. May 20, 2026: FirstEnergy, FirstEnergy Transmission and the Brookfield fund that owns 49.9% of it amended their agreement so that FET can take part in two new transmission joint ventures, Valley Link and Grid Growth. The ownership split did not change. Jan 7, 2026: The Public Utilities Commission of Ohio ordered the Ohio utilities to pay customers about $275 million in restitution and refunds. FirstEnergy had recorded the cost in Q4 2025, and it had paid about $266 million by June 30, 2026.