UBS Maintains a 'Neutral' on FirstEnergy (FE); Reading Power Slide through Retail Lense
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Price: $47.41 +1.22%
Rating Summary:
16 Buy, 12 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
16 Buy, 12 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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UBS maintains a 'Neutral' on FirstEnergy Corp. (NYSE: FE) price target cut from $43 to $40.
UBS analyst says, "FE retail strategy “brings forward” capacity value; alleviates decline: We met with FE mgmt earlier this week to discuss their retail strategy in 2012. We perceive emphasis has only expanded to focus on signing longer tenor retail deals to “average” in higher retail rates from higher capacity prices in 2014+ into 2012/13 to offset the commodity decline. We emphasize the outsized win of 3-year contracts in the Duke energy auction in Dec. at ~$57/MWh and robust ~$6-7/MWh margins as indicative of this strategy; That said, we believe mgmt is sober on its assessment for increased competition in Ohio (likely driving down
margins)."
"Given the substantial slide in power forwards since their Analyst Day in May, we believe the $3.20-3.50 range for ’13 is likely to be revised down, albeit to a range around ~$3.10/share, assuming plant rationalization and fuel cost savings. However, with 2014 EPS around ~$3.30 at best, expectations remain full."
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 $42.20 yesterday.
UBS analyst says, "FE retail strategy “brings forward” capacity value; alleviates decline: We met with FE mgmt earlier this week to discuss their retail strategy in 2012. We perceive emphasis has only expanded to focus on signing longer tenor retail deals to “average” in higher retail rates from higher capacity prices in 2014+ into 2012/13 to offset the commodity decline. We emphasize the outsized win of 3-year contracts in the Duke energy auction in Dec. at ~$57/MWh and robust ~$6-7/MWh margins as indicative of this strategy; That said, we believe mgmt is sober on its assessment for increased competition in Ohio (likely driving down
margins)."
"Given the substantial slide in power forwards since their Analyst Day in May, we believe the $3.20-3.50 range for ’13 is likely to be revised down, albeit to a range around ~$3.10/share, assuming plant rationalization and fuel cost savings. However, with 2014 EPS around ~$3.30 at best, expectations remain full."
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 $42.20 yesterday.
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