By Peet Serfontein & Khumbulani Kunene
We initiate a long position with a target price of $45.00 and a stop-loss of $39.00 (Risk/reward ratio 1:2.7).
FirstEnergy Corp. is a leading electric utility company which, through its subsidiaries, generates, transmits and distributes electricity and offers exploration, production and distribution of natural gas. FirstEnergy also provides energy management and other energy related services. The company controls more than 24 000 miles of transmission lines and has two regional transmission operation centres.
Headquartered in Akron, Ohio, FirstEnergy serves over six million customers across the Midwest and Mid-Atlantic regions. The company is focused on modernising the grid, enhancing reliability, and transitioning toward cleaner energy solutions to meet evolving regulatory and environmental standards.
Technically, a developing symmetrical triangle pattern presents as a promising investment opportunity for the stock (see the black converging trendlines on the main chart). This patten highlights a period of consolidation before a potential breakout and is characterised by lower highs and higher lows, signalling that buyers and sellers are steadily converging into a point of equilibrium. A bullish breakout is confirmed when the price moves above the upper trendline on increasing volumes.
A price in the accumulation phase of the Wyckoff price cycle also supports a bullish case for the stock (see the insert). This further supports our bull case by highlighting that institutional money is discreetly acquiring shares at discounted prices before a major uptrend begins. The stock typically moves sideways (within a range). A breakout above the resistance confirms that the accumulation is complete, leading to a markup phase where prices trend higher.
Fading downside price momentum per the MACD indicator, as well as the recent uptick trajectory of the on-balance volume (OBV) indicator, supports our bullish view.
| Share Information | |
|---|---|
| Share Code | FE US |
| Industry | Utilities |
| Market Capital (USD) | 23.4 billion |
| One Year Total Return | 13.30% |
| Return Year-to-Date | 3.22% |
| Current Price (USD) | 40.63 |
| 52 Week High (USD) | 44.97 |
| 52 Week Low (USD) | 36.01 |
| Financial Year End | December |
| The stock price is just below its 200-day simple moving average (SMA), but above its 200-week and 200-month SMA. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY23 | FY24E | FY25E | FY26E | |
| Headline Earnings per Share (USD) | 2.56 | 2.67 | 2.88 | 3.09 |
| Growth (%) | 4.26 | 8.06 | 7.00 | |
| Dividend Per Share (USD) | 1.60 | 1.69 | 1.79 | 1.90 |
| Growth (%) | 5.62 | 5.80 | 6.21 | |
| Forward PE (times) | 13.95 | 13.05 | 13.17 | |
| Forward Dividend Yield (%) | 4.16 | 4.40 | 4.67 | |
| Earnings growth is expected to be moderate in the short-to-medium term. A hard currency forward dividend yield above 4% is regarded as attractive. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | CMG US - Stop loss (Close the position) |
MPWR US - Buy (Continue to hold) |
DELL US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 58.99 | 617.57 | 111.44 |
| Current | 54.49 | 690.77 | 120.34 |
| Movement | -7.6% | +11.9 | +8.0% |
| The share price breached our stop loss level and we exited the trade. |
A gap in the price of the stock remains of interest. Remains sandwiched between its 200-week and 200-day simple moving averages. Upside price momentum is supportive.
Our profit target remains at $788.00 with a trailing stop-loss at $625.00. Exit the trade by 2 April 2025. |
The stock appears to be undervalued compared to its peers remains of interest. Remains just below its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $138.00 with a trailing stop-loss at $109.50. Exit the trade by 30 April 2025. |
| Share Name and Position | CHTR US (Buy) (Continue to hold) |
DOV US (Buy) (Continue to hold) |
STE US (Buy) (Continue to hold) |
|---|---|---|---|
| Entry | 340.26 | 194.48 | 217.20 |
| Current | 361.74 | 205.36 | 219.66 |
| Movement | +6.3% | +5.6% | +1.1% |
|
A price in a developing symmetrical triangle pattern remains of interest. Remains just above its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $390.00 with a trailing stop-loss at $335.50. Exit the trade by 30 May 2025. |
Some seasonal trends in the price of the stock remains of interest. Remains above its 200-day simple moving average. Upside price momentum is supportive.
Our profit target remains at $214.00 with a trailing stop-loss at $197.50. Exit the trade by 9 May 2025. |
An Elliott wave price that is forming a trough remains of interest. Remains below its 200-day simple moving average. Upside price momentum supports the trade.
Our profit target remains at $239.00 with a trailing stop-loss at $211.00. Exit the trade by 18 April 2025. |
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