FirstEnergy Corporation’s FE ongoing investments should increase grid reliability and enable it to serve customers efficiently. The company’s initiative to further strengthen transmission and distribution operations should boost its performance.
However, this Zacks Rank #3 (Hold) company faces risks related to delays in the base rate request approval and seasonal factors.
Factors Acting in Favor of FE
FirstEnergy is benefiting from better economic conditions and increased demand from commercial and industrial organizations. The company is set for data center development across its footprint. FE’s 2025-2029 plan includes 2.6 gigawatts of active or contracted demand, with more in the pipeline that would be incremental to its base investment plan.
The company’s ‘Energize365’ is a multi-year grid evolution platform, focused on enhancing customer experience while maintaining its strong affordability position with rates at or below its in-state peers. With planned investments of $28 billion between 2025 and 2029, FE is set to install advanced equipment and technologies that will strengthen and modernize its transmission and distribution infrastructure.
In April 2025, JCP&L got approval for its EnergizeNJ infrastructure investment program. EnergizeNJ is part of the Energize365 program. The EnergizeNJ program includes more than $20.4 million in a Grid Modernization initiative that will replace solid fuses along power lines with TripSaver II devices. These initiatives should further help upgrade electric grid and enhance service reliability.
Challenges Faced by FE
FirstEnergy cannot guarantee the approval of any base rate request, whether in whole or in part. Any denial of or delay in base rate request approval could restrict the company from fully recovering its service costs, which might adversely impact its operations, cash flows and financial condition.
The sale of electric power is generally a seasonal business, and weather patterns can have a material impact on FirstEnergy’s Regulated Distribution operating results. Demand for electricity in the service territories historically peaks during the summer and winter months. Mild weather conditions may result in reduced power sales and, consequently, lower revenues, earnings and cash flow.
FE’s Stock Price Performance
In the past three months, shares of the company have risen 5.3% compared with the industry’s 3.3% growth.
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Stocks to Consider
Some better-ranked stocks from the same industry are Portland General Electric POR, CenterPoint Energy CNP and OGE Energy OGE, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
POR’s long-term (three to five years) earnings growth rate is 3.44%. The Zacks Consensus Estimate for 2025 earnings per share (EPS) is pinned at $3.21, indicating year-over-year growth of 2.2%.
CNP’s long-term earnings growth rate is 7.76%. The Zacks Consensus Estimate for 2025 EPS is pegged at $1.75, indicating a year-over-year improvement of 8%.
OGE’s long-term earnings growth rate is 6.32%. The company delivered an average earnings surprise of 4.6% in the last four quarters.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
