FirstEnergy Corp. (FE) Is No Stock For Little Old Ladies

Will FirstEnergy Corp. (NYSE:FE) rip to new highs anytime soon? Who knows, but much of it depends on what analysts believe and what action the company’s insiders pursue. The stock closed higher on 12 February. The shares accumulated 0.17 points or 0.43 percent at $39.52 with a light trade volume of 3.81 million shares. After opening the session at $39.43, the shares went as high as $39.78 and as low as $39.2, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $20.1 billion and now has 509.11 million shares outstanding. FirstEnergy Corp. (FE) stock has gained 3 percent of market value in 21 trading days.

FE stock has a trailing 3-year beta of 0.27, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$4.65 a share in the trailing twelve months. The stock’s value has surged 5.25 percent year to date (YTD) against a rise of 26.3 percent in 12 month’s time. The company’s shares still trade -0.9 percent away from its 1-year high of $39.88 and 27.11 percent up from 52-week low of $31.09. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

FirstEnergy Corp. (FE) will probably climb 3.74 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $46 price as 12-month high target. This represents a whopping 16.4 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $40.5, which represents a return potential of 2.48 percent when compared to the closing price of the stock of $39.52 on Tuesday, February 12. The lowest price target for the stock is $38 — slightly more than -3.85 percent from FE’s current share price.

History has shown that shares in FirstEnergy Corp. have gone down on 20 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. Investors will get their next glimpse of FE’s Q4 earnings on February 19. Analysts are forecasting revenue to suffer decline of -21 percent to $2.72B in the fiscal fourth quarter, while earnings are seen soaring by nearly -33.8 percent to $0.47 per share. It earned $0.8 per share, better than the $0.71, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $3.06B, better than the $2.94B analysts expected. Earnings are estimated to increase by 73.3 percent this year, 0.59 percent next year and continue to increase by -6.61 percent annually for the next 5 years.

Let’s take a look at some insider activity at FirstEnergy Corp. (NYSE:FE) and see the pattern. The earliest insider trade took place on 01/09/2019. Pearson James F parted with a total of 40 thousand shares of company at average share price of $37.87. The total for the sales was set at $1.51 million. After this transaction, the EVP, Finance account balance stood at 146.04 thousand shares. The stock grew 4.36 percent since that insider sale. On 09/11/2017, Misheff Donald T, Director, purchased 0.1 thousand shares at a price per share of $32.53. This added 3.25 thousand shares to the insider’s fortune and the stock saw a 21.49 percent rally in value since the news became public. This transaction left 0.1 thousand shares in the Director account.

On 12/20/2016, President, FE Solutions Schneider Donald R performed a sale transaction worth $204.62 thousand. This sale at $31.36 each has eliminated 6.53 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 26.02 percent increase since the transaction was reported. The insider now is left with 24.32 thousand shares remaining in the account. Lasky Charles D, who performs the SVP, Human Resources job, sold 5.15 thousand shares for $161.47 thousand. The disposal occurred on 12/20/2016 was priced at $31.36 per share. The share price soared 26.02 percent since the reporting date. Lasky Charles D now left with a stake of 61.84 thousand FE stock worth $2.44 million after the insider selling.

The stock is currently hovering around the first support level of $39.22. Below this, the next support is placed in the zone of $38.92. Till the time, the FE stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 58.13 on daily chart, which may remain a cause for concern. If the price breaks below $38.92 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $39.8 mark may result into a pull-back move towards $40.08 level.

Further, it is sporting a 1.68 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.27. 73.9 percent is the gross profit margin for FirstEnergy Corp. and operating margin sits at 21.6 percent. Along with this, the net profit margin is 17.4 percent.