Key insights
- Goldman Sachs raised its price target on FirstEnergy (FE) due to strong data center demand driving earnings growth. FE has 4.3 GW of contracted demand and a 15 GW pipeline through 2035. The firm sees potential for natural gas plant construction in West Virginia and transmission investments. Regulatory risks in New Jersey and Maryland are noted, but FE is relatively well-positioned on affordability. The stock trades at a P/E discount.
Investing.com - Goldman Sachs raised its price target on FirstEnergy Corp. (NYSE:FE) shares to $54.00 from a prior target while maintaining a Buy rating on the utility stock.
The firm updated its estimates for FirstEnergy following first-quarter earnings that came in broadly in line with expectations. Goldman Sachs said it remains encouraged by the earnings execution over the last twelve months. The company posted revenue of $15.34 billion with an 11.4% growth rate, while maintaining its 3.8% dividend yield—a distribution it has sustained for 29 consecutive years, according to InvestingPro data.
The firm’s estimates remain toward the top end of management guidance of 6% to 8% earnings per share growth through 2030. Goldman Sachs identified data center growth as the main upside driver, noting FirstEnergy now has approximately 4.3 gigawatts of contracted demand with a total pipeline of roughly 15 gigawatts through 2035 across its service territory.
Much of the data center demand could come in West Virginia where FirstEnergy has the ability to build incremental natural gas power plants. The firm also sees incremental investment opportunities in transmission with the PJM open window awards to help support load growth across PJM.
Goldman Sachs noted regulatory risk across New Jersey and Maryland but said FirstEnergy has better relative positioning on affordability in its service areas. The stock trades at a 6% price-to-earnings discount relative to Goldman Sachs coverage in 2027. Currently trading at a P/E ratio of 26.93, InvestingPro analysis suggests the stock is undervalued relative to its Fair Value. For deeper insights, investors can access FirstEnergy’s comprehensive Pro Research Report, one of 1,400+ available for US equities on the platform.
In other recent news, FirstEnergy Corporation reported its financial results for the first quarter of 2026, exceeding analyst expectations. The company achieved earnings per share of $0.72, slightly above the forecasted $0.71. Additionally, FirstEnergy’s revenue reached $4.2 billion, surpassing the anticipated $3.87 billion. Despite these positive financial results, the company’s stock experienced a decline in premarket trading. These recent developments highlight FirstEnergy’s ability to outperform market expectations in terms of earnings and revenue.
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