Jefferies Remains Sidelined on FirstEnergy (FE) After Adjusting Forecast

October 24, 2016 7:59 AM EDT
Get Alerts FE Hot Sheet
Price: $30.73 +0.66%

Rating Summary:
    9 Buy, 11 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 21 | Down: 36 | New: 11
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Jefferies reiterated a Hold rating on FirstEnergy Corp. (NYSE: FE), and raised the price target to $34.50 (from $34.00), after adjusting estimates. Jefferies has updated its forecast and no longer believes that management will defend the parent against a Moody’s downgrade. In 2017-18 Jefferies is forecasting FirstEnergy Solutions FFO/Debt in the 15-16% range which helps the parent credit metrics.

Analyst Anthony Crowdell commented, "We have revised our assumptions for equity needs and believe that management will not defend against a potential parent downgrade. With that being said we struggle to find FE as a compelling investment opportunity given 1) using a P/E valuation that ignores the $8.5B of parent debt and 2) the headwinds that a potential FES bankruptcy may bring."

For an analyst ratings summary and ratings history on FirstEnergy Corp. click here. For more ratings news on FirstEnergy Corp. click here.

Shares of FirstEnergy Corp. closed at $33.19 yesterday.



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