UPDATE: KeyBanc Downgrades FirstEnergy Corp. (FE) to Sector Weight

(updating comment)

KeyBanc analyst Sophie Karp downgraded FirstEnergy Corp. (NYSE: FE) from Overweight to Sector Weight.

The analyst comments "We are concerned about the potential implications for FE, which we find impossible to predict with any degree of certainty at this juncture. The FBI affidavit that details the allegation does not name FE (referred to throughout the document as Company A) as a co-defendant, and it is our understanding that the government is not currently looking to indict "Company A" or any individuals associated with it. In fact, the majority of the allegations detailed in the affidavit appear to relate to the misuse of funds contributed by "Company A" to Generation Now, a 501(c)4 entity, by the Speaker and other individuals. FE has always acknowledged looking for legislative solutions to the challenges faced by its former nukes, with an eye for preserving Ohio jobs, balanced power generation mix, and the carbon-neutral capacity nuclear plants provide, which is, in and of itself, a legitimate activity. That said, some parts of the narrative of the affidavit appear to suggest, based on the timing of phone interactions between government officials under investigation and Company A, as well as the timing of monetary contributions to Generation Now, some degree of collusion between Company A and "the Enterprise" of the Speaker and his associates. Predictably, FE was served with subpoenas today as the government indicated the investigation is still in the early stages during the press conference."

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 $34.25 yesterday.

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