Jefferies Upgrades FirstEnergy Corp. (FE) to Hold, Will Remain Investment Grade Following Moody's Rating
Tweet
Share
E-mailGet Alerts FE Hot Sheet
Price: $45.96 -2.59%
Rating Summary:
16 Buy, 12 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
16 Buy, 12 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Jefferies upgraded shares of FirstEnergy Corp. (NYSE: FE) to a Hold rating from its previous rating of Underperform and is raising its price target from $30 to $38.
The firm expects that FE will remain investment grade following Moody's rating review. Its also notes that the company will generate significant cash from asset sales and bonus depreciation, which can be used to pay down debt and avoid equity issuance.
Jefferies is raising its 2011 and 2013 EPS estimates by $0.15 to $3.05 and $2.60, but is maintaining its 2012 estimate of $2.55. The estimate increases reflect the firms new model which include 50% of unregulated merger savings projected by the company when the merger was announced, and all the merger savings at corporate and utility level. The firm believes that its 50% estimate may prove to be conservative and is sees FE earning above $3 per share in 2014.
FirstEnergy has already agreed to sell the Fremont power plant for $485 million by mid 2011. Jefferies assumes that it will sell it's share in Signal Peak coal mine by the end of the year for some $600 million and comments that management is expecting some $300 million contribution from bonus depreciation in 2011.
For more ratings news on FirstEnergy Corp. click here and for the rating history of FirstEnergy Corp. click here.
Shares of FirstEnergy Corp. closed at $38.11 yesterday.
The firm expects that FE will remain investment grade following Moody's rating review. Its also notes that the company will generate significant cash from asset sales and bonus depreciation, which can be used to pay down debt and avoid equity issuance.
Jefferies is raising its 2011 and 2013 EPS estimates by $0.15 to $3.05 and $2.60, but is maintaining its 2012 estimate of $2.55. The estimate increases reflect the firms new model which include 50% of unregulated merger savings projected by the company when the merger was announced, and all the merger savings at corporate and utility level. The firm believes that its 50% estimate may prove to be conservative and is sees FE earning above $3 per share in 2014.
FirstEnergy has already agreed to sell the Fremont power plant for $485 million by mid 2011. Jefferies assumes that it will sell it's share in Signal Peak coal mine by the end of the year for some $600 million and comments that management is expecting some $300 million contribution from bonus depreciation in 2011.
For more ratings news on FirstEnergy Corp. click here and for the rating history of FirstEnergy Corp. click here.
Shares of FirstEnergy Corp. closed at $38.11 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- FirstEnergy Corp. (FE) PT Lowered to $52 at Morgan Stanley
- Rothschild Redburn Upgrades Equifax (EFX) to Buy
- Jefferies Downgrades Pop Mart International Group Ltd (9992:HK) to Hold
Create E-mail Alert Related Categories
UpgradesRelated Entities
Jefferies & CoSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
