A Fresh Look at FirstEnergy (FE) Valuation After Recent Share Price Gains

FirstEnergy (FE) shares have edged modestly higher this week, building on gains from the past month. Investors are weighing the company's recent performance and taking a closer look at its outlook within the broader utilities sector.

See our latest analysis for FirstEnergy.

FirstEnergy’s share price momentum has picked up noticeably in recent months, with a 5.8% gain over the past month and an 11.2% rise for the latest quarter. This has pushed its year-to-date price return to 16.9%. Measured by total shareholder return, the stock is up 12% over the past year and has delivered nearly 94% over five years. These figures reflect a steady performance that has helped shift sentiment around its growth and resilience.

If you’re curious what else is building up steam, now’s a great moment to broaden your perspective and discover fast growing stocks with high insider ownership

Given the stock’s significant gains and an improved financial outlook, investors may wonder if FirstEnergy is still trading at a bargain or if the current price already reflects all its future growth potential.

Most Popular Narrative: 3.7% Undervalued

FirstEnergy's latest fair value estimate stands at $48.45, just above the recent close of $46.64. This small premium reflects solid future expectations, with analysts taking a cautiously optimistic view of strong investment and near-term earnings momentum.

Large-scale infrastructure modernization and grid hardening initiatives, including the $28 billion investment plan through 2029 and a 15% CAGR in transmission rate base, support higher returns on equity, improved reliability, and ultimately enhance net margins and earnings growth.

Read the complete narrative.

Want to know what’s fueling this price target? The calculation is based on a mix of accelerating infrastructure spending, disciplined cash deployment, and margin expansion. Find out which future projections and which tension points between spending and profits influence this valuation debate.

Result: Fair Value of $48.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory uncertainty and higher funding costs could still derail FirstEnergy’s growth. These factors present notable risks for investors to watch in the months ahead.

Find out about the key risks to this FirstEnergy narrative.

Another View: Looking at Value Through a Different Lens

While the fair value approach suggests FirstEnergy is slightly undervalued, our SWS DCF model paints a more cautious picture. According to this model, the stock is trading above its estimated fair value. This potentially signals less room for upside than the multiples-based case implies. Could different assumptions about future cash flows swing the balance?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out FirstEnergy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own FirstEnergy Narrative

If you have your own perspective or want to dive deeper into the details, you can assemble your personalized view in minutes. Do it your way

A great starting point for your FirstEnergy research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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