FirstEnergy's Reaffirmed Earnings Outlook and Growth Projections Through 2029

FirstEnergy reaffirmed its 2025 earnings outlook at $2.40-$2.60 per share and anticipates 6-8% annual core earnings growth through 2029. The company's $28 billion investment strategy, Energize365, supports this growth. FirstEnergy's financial health is mixed, with 7.3% revenue growth and high gross margin, but a low interest coverage ratio and distress zone Altman Z-Score. The stock's valuation metrics suggest undervaluation, with a P/E ratio of 22.23 and P/B ratio of 1.92.

FirstEnergy Corporation (FE) reaffirmed its 2025 earnings outlook at $2.40 to $2.60 per share, reflecting strong execution on its investment strategy, Energize365. The company expects 6-8% annual core earnings growth through 2029, supported by a $28 billion capital investment plan.

In the second quarter of 2025, FE reported core earnings of 52 cents per share, beating the Zacks Consensus Estimate of 50 cents by 4% [1]. This was driven by new base rates in Pennsylvania and growth in transmission rate base under formula rate programs, partially offset by milder temperatures reducing customer demand by nearly 3%. GAAP earnings were 46 cents per share, up from 8 cents in the second quarter of 2024.

Revenues totaled $3.38 billion, a 1% miss of the Zacks Consensus Estimate of $3.41 billion, but up 3% from the year-ago quarter. Segmental performance showed revenues from the Integrated segment increasing by 1.6% to $1.68 billion, while the Stand-Alone Transmission segment saw a 3% decrease to $456 million.

Operating expenses were $2.73 billion, down 4.5% from the year-ago quarter, resulting in operating income of $646 million, up 52.7% year-over-year. Interest expense was $299 million, up 4.9% from the prior-year level.

FirstEnergy's 2025 capital investment plan is expected to be $5 billion, with a long-term growth rate of 6-8%. The company's Zacks Rank is #3 (Hold) [1]. The stock's valuation metrics suggest undervaluation, with a P/E ratio of 22.23 and P/B ratio of 1.92.

Reference:
[1] https://finance.yahoo.com/news/firstenergy-q2-earnings-surpass-estimates-124000703.html