FE
FirstEnergy Corp.
$46.19
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 64.0% above fair value
You pay
$46.19
Bear
$24.64
Fair
$28.16
Bull
$31.68
Bear
$24.64
-46.7%
$1.76 × 14x P/E
Fair
$28.16
-39.0%
$1.76 × 16x P/E
Bull
$31.68
-31.4%
$1.76 × 18x P/E
Adjust Assumptions
16.0x
1.76$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
26.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$51.00
Divergence from AlphaVal
45%
Summary
Applying a 16x P/E to adjusted EPS of $1.76, the base-case value is $28.16 per share. DDM cross-check: $40.96.
Warnings
The company pays out 105% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $40.96 (above our primary estimate by 45%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $51.00 (from 28 analysts). Our estimate is 45% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples