FirstEnergy Corp.

(New York Stock Exchange)
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Somewhat Bullish +45

FirstEnergy Sees Q3 Core EPS Rising on Investment, Higher Rates, BofA Says - Yahoo Finance

Earnings report Financial outlook AI-generated analysis

πŸ“… FirstEnergy is scheduled to report Q3 2026 earnings after market close on October 27, with investors anticipating higher core EPS driven by data center demand.

⚑ The company has contracted 6.4 GW of data center load with a forecasted total of roughly 25 GW by Q2 2026, supporting long-term revenue and earnings growth.

πŸ—οΈ FirstEnergy reaffirmed its Energize365 capital plan, allocating US$6 billion for 2026 and a total US$36 billion program through 2030 for grid modernization.

πŸ’° Shares currently trade at US$46.15 with a fair value estimate of US$51.42, suggesting an undervalued status according to some community members.

πŸ“‰ The stock trades at a P/E ratio of 24.6x, which is higher than the US Electric Utilities industry average of 20.8x and peer average of 13.4x.

⚠️ Rising operation, maintenance, and storm restoration costs pose a risk to free cash flow and could strain the company's ability to keep customer bills affordable.

πŸ“ˆ Analysts model 4.9% yearly revenue growth for the next three years, assuming regulated projects will improve profitability from current margins of 6.9% to 11.3%.

🏦 The capital-intensive Energize365 program requires careful funding management to avoid large equity raises and maintain a clean earnings per share read.

πŸ“‰ FirstEnergy currently carries a Zacks Rank #3 (Hold), indicating that the odds of an earnings beat are not conclusively predicted by its current metrics.

πŸ” Management must successfully tie data center demand and grid upgrades to recoverable rate base growth to justify the rich valuation relative to peers.

Bullish Signals
  • FirstEnergy is benefiting from surging demand from data centers and industrial power users, with 6.4 GW already contracted and a forecast of roughly 25 GW by Q2 2026.
  • The company reaffirmed its Energize365 capital plan with US$6 billion for 2026 and a broader US$36 billion program through 2030 to modernize the grid.
  • Analysts project revenue growth of approximately 4.9% annually over the next three years as regulated projects convert into a steadier earnings base.
  • The stock trades at a fair value of US$51.42, which is higher than the current price of US$46.15, suggesting potential upside for investors.
  • FirstEnergy has delivered a positive earnings surprise of 2.04% in the last reported quarter, indicating strong recent performance.
Risk Factors
  • Heavy grid and data center spending combined with rising operation, maintenance, and storm restoration costs could keep cash flow tight.
  • The stock trades at a P/E ratio of 24.6x, which is significantly higher than the US Electric Utilities industry average of 20.8x and peer average of 13.4x.
  • Regulators may push harder on bill affordability, creating a risk that earnings could lag spending if cost recovery is delayed.
  • FirstEnergy currently carries a Zacks Rank #3 (Hold), suggesting that the combination of positive Earnings ESP and rank does not conclusively predict an earnings beat.
Full Analysis
FirstEnergy (FE) is preparing to release its third-quarter 2026 earnings on October 27, with analysts expecting core EPS to rise driven by surging demand from data centers and industrial power users. The company faces a dual narrative of growth opportunities against a backdrop of elevated operating costs, including maintenance and storm restoration expenses, which could pressure free cash flow. A central theme for FirstEnergy is its Energize365 grid modernization program, with US$6 billion earmarked for 2026 and a broader US$36 billion commitment through 2030. This heavy capital spending aims to upgrade poles, wires, and substations to meet the roughly 25 GW of forecasted data center load by Q2 2026, though execution quality and regulatory support for cost recovery remain critical to translating these investments into earnings. Valuation metrics suggest FirstEnergy is trading at a premium compared to peers, with a P/E ratio of 24.6x versus a sector average of 20.8x and a fair value estimate around US$51.42. Analysts project revenue growth of approximately 4.9% annually over the next three years, assuming that regulated projects will successfully convert into a steadier earnings base while maintaining acceptable customer bill affordability. The upcoming earnings report will serve as a key test for whether FirstEnergy can effectively match its heavy grid investment with rising electricity demand without succumbing to margin compression from rising costs. Investors are weighing the potential upside from data center load ramps against the risks of tight cash flow and regulatory scrutiny on utility rates.