FE changes
Pick any two versions below to diff them.
- Price
- $46.91 → $46.53(−0.8%)
- 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 removed: $29.0 added: $30.1 billion at removed: June added: September 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 removed: $29.0 added: $30.1 billion at removed: June added: September 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: removed: $63M added: $48M Debt: removed: $29.0B added: $30.1B Net debt: removed: $28.9B added: $30.0B Debt due within 12 months: removed: $1.9B added: $4.1B 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 removed: June added: September 30, 2026, long-term debt and other long-term obligations were removed: $27.10 added: $25.93 billion, currently payable long-term debt was removed: $505 million added: $2.16 billion and short-term borrowings were removed: $1.38 added: $1.97 billion, so total debt was about removed: $29.0 added: $30.1 billion, up from $26.6 billion at December 31, 2025. Cash was removed: $63 added: $48 million. In the first removed: half added: nine months of 2026, FirstEnergy issued removed: $2.08 added: $2.58 billion of long-term debt, repaid removed: $694 added: $720 million and added removed: $1.05 added: $1.65 billion of short-term borrowings, while capital investments were removed: $2.60 added: $4.19 billion. Operating cash flow fell to removed: $1.14 added: $2.06 billion from removed: $1.72 added: $2.56 billion, partly because of removed: $266 million of added: the 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 removed: Jun added: Sep 30, 2026.