Could FirstEnergy Stock Offer Decent Upside Potential from Here?
Analyst price targets
According to Wall Street analyst estimates, FirstEnergy (FE) stock has a mean price target of 34.47 against its current market price of $30.06, which indicates an implied gain of 15% going forward.
Among the total 18 analysts tracking FirstEnergy, 12 analysts currently rate the stock a “hold.” One analyst rates the stock a “strong buy” while five rate it a “buy.” Note that no analysts recommend FE stock as a “sell” as of September 28.
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FirstEnergy’s bigger peer and the country’s largest competitive utility, Exelon (EXC), has a mean price target of $41.19 against its current market price of $37.15, which implies an estimated upside of 11% going forward.
Another competitive utility stock, Entergy (ETR), has an estimated upside of 4%. It has a mean price target of $79.33 against its current market price of $76.46.
FirstEnergy stock might seem to be offering an attractive upside potential going forward. However, it’s advisable for investors to assess the risks associated with competitive utilities. They’ve significantly underperformed broader utilities (XLU)(VPU) in the last three-year and five-year periods, likely due to their volatile earnings. FirstEnergy becoming a pure-play utility might bode well for its earnings growth and investors’ returns as well.
Large-cap utility stocks have shown a decent rally so far this year. Very few SPX utilities now seem to have potential to rally further. You can read about these stocks in Market Realist’s series These SPX Utilities Could Gain You More than 10% from Here.