_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Firstenergy Corp. (XNYS:FE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FE
Name:
FIRSTENERGY CORP. (XNYS:FE)
Sector:
- 165000.00K
Industry:
Utilities�Regulated Electric
CEO:
Mr. Charles Jones
Total Employees:
12,395
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -9.77% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FIRSTENERGY CORP.(FE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED ELECTRIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
39.91
One Month Price Target:
$40.01
Six Month Price Target :
$40.5
Likely Price in One Year's Time:
Ticker:
$41.1
Likely Trading Range Today Under (Normal Volatility)
$39.76
Price Upper limit ($) :
$40.06
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$38.06
This week:
$35.77
This month :
$31.63
Other Primary facts
Market Cap:
22.70B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
571.40M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.94%
-20.91%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$48.50
$44.60
$31.32
$35.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$43.33
Buy Put:
Sell Put:
$42.49
$36.48
$37.33
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FE
Sharpe Ratio:
-0.42%
Comparison:
FE, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -135.83% lower than the industry
& is -118.42% lower than the market/S&P 500 average
Average Returns/Yield of
FE
Daily returns:
0.00%
Weekly returns:
0.00%
Monthly returns:
-0.01%
Yearly returns:
7.85%
Comparison of returns:
Average annual returns/yield (last 3 years) is -101.92% below industry average
Classification:
FE, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.92
Statistical test of Returns:
FE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.26%
Weekly Volatility:
5.05%
Monthly Volatility:
10.10%
Yearly Volatility:
34.98%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.19%
Volatility in last five trading days has been -47.41% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.64%
Weekly VaR:
-10.37%
Monthly VaR:
-20.74%
How Much Can the price of
FE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.84%
This translates to price declining to:
$32.59
This translates to price declining to:
$11.24
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
FE is a 46.37% riskier investment compared to the market/S&P 500 & is 25.40% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 11.26% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FE
Beta in relation to market/S&P 500--0.44
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.149
Beta in relation to Nasdaq (XNAS):
0.575
Beta in relation to all global stocks::
0.813
Beta Comparison & Analysis
Beta of competitors/peers::
0.569
Beta is -22.14% lower than peers
Average Industry Beta:
0.5
Beta is -11.33% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.04%
Sustainable growth rate is 44.38% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.063
Alpha is -596.84% below industry average alpha yield
Alpha is -403% below the market average
Analysis of Cost of Capital of
FE
Equity cost of capital:
0.062
Equity cost of capital is -5.90% below industry mean WACC
Unlevered (without debt) cost of capital:
2.09%
Before-tax cost of debt:
4.70%
After-tax cost of debt:
3.71%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.71%
WACC is -6.67% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$19.94
Revenue growth rate per share of (3Y):
2.6
Annual revenue growth rate is 778.20% above the industry average
EPS:
$2.24
Expected Annual growth rate of EPS (3Y):
10.12%
Expected future EPS growth rate is -263.61% lower than the Utilities�Regulated Electric industry
Free cash flow (FCF) per share:
$0.47
Balance sheet equity growth per share: -0.54%
Equity growth rate per share is -109.17% lower than the industry
Debt per share
$38.07
EBITDA per share
$7.26
Valuation Analysis Today of
FE
P/E Ratio:
16.79
P/E Ratio of Competitors/Peers:
48.08
P/E ratio is -65.08% lower than main peers & is -39.36% lower than the industry
Stock price/value with industry average P/E ratio: $62.02
FE is -35.65% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $54.11
Present value of the expected future dividends only: $26.40
P/S (Price to Sales ratio):
2
Price to sales ratio is -31.06% below the industry mean
P/B (Price to book value ratio):
2.6
Price to free cash flow: 85.73
-
Net income growth rate (3Y):
-13.92%
Net income growth rate is 372.58% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 17.96%
Dividend yeild: 3.91%
Previous Dividend: $0.39
Previous adjusted dividend: $0.39
Previous Dividend: $1.56
Expected next dividend best case: $0.39
Expected next dividend worst case: $0.39
Average dividend payment (long-term): $0.39
Average dividend increase/decrease (growth rate) % per period: 0.26%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 08/04/2022
Expected next dividend declaration date: 13/06/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 05/06/2022
Previous dividend declaration date: 15/03/2022
Dividend History:
2022-05-05--$0.39
2021-11-04--$0.39
2021-05-06--$0.39
2022-02-04--$0.39
2021-08-05--$0.39
2021-02-04--$0.39
Dividend growth rate is -126.00% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
248.48%
Net debt to equity ratio:
261.29%
Debt to assets ratio:
48.76%
Net debt to assets ratio:
51.27%
Debt-to-asset ratio is -22.42% below industry average
Ability to repay debt:
Interest coverage ratio:
3.81
Interest coverage ratio is 48.00% more than industry average
Looking forward:
Debt growth rate:
-2.55%
Annual debt growth is -106% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.59%
Analysis of Key Statistics
Correlation of price movement with the market:
0.567
Statistical significance of correlation:
FE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.597
Stock price is -5.02% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.597
Correlation of price movement with Nasdaq (^IXIC):
0.067
Covariance of price movement with the market:
0.088
Kurtosis
25.252
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.696
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
FE
Gross Profit Margin Ratio:
273%
Operating Profit Margin Ratio:
15.15%
Operating profit margin is 30.19% higher than the industry
Net Profit Margin Ratio:
273%
Effective Tax Rate:
20.95%
Effective tax rate is 4.07% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
14.12%
Return on equity (ROE) is 55.30% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.77%
Return on assets (ROA) is 19.81% higher than the industry
Financial Leverage:
2.0x
Current Ratio:
0.52
Current ratio is -78.44% below industry average
Cash Conversion Cycle (days):
-38.2
Cash conversion cycle is -140.45% below industry average
The remaining useful life of property plant & equipment is: 6.9 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
919.3K
Each employee generates -67% less revenue than industry average revenue per employee
EBITDA generated per employee:
334.5K
Each employee generates -71% less EBITDA than industry average revenue per employee
Profit generated per employee:
99.7K
Each employee generates -76% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 13.3K
Each employee generates -60% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.4M
Each employee generates -60% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FE
DTE
AMEREN CORPORATION (XNYS:AEE)
PPL CORPORATION (XNYS:PPL)
EDISON INTERNATIONAL (XNYS:EIX)
Fortis Inc. (XNYS:FTS)
PG&E CORPORATION (XNYS:PCG)
Avangrid, Inc. (XNYS:AGR)
CMS ENERGY CORPORATION (XNYS:CMS)
BROOKFIELD INFRASTRUCTURE PARTNERS L.P. (OTCM:BINFF)
Current Analyst Ratings
Strong buy�4%
Buy�21%
Hold�46%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
11.40B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.62B
7.77B
-
-
- 382000.00K
-
5.82B
5.43B
-
1.09B
1.51B
4.15B
1.73B
1.24B
1.51B
316.00M
1.24B
Statement of Cash Flow
Date:
Period:
359.00M
Differed Income Tax :
77.00M
Stock Based Compensation :
-
Change in Working Capital :
- 287000.00K
Accounts Receivables:
-
Other Working Capital:
- 106000.00K
Other Non-Cash Items:
- 82000.00K
Net Cash Provided by Operating Activities:
355.00M
Investments in PP&E:
- 520000.00K
Net Acquisitions:
-
Purchases of Investments:
- 9000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
283.00M
-
283.00M
1.37B
273.00M
322.00M
2.25B
35.00B
5.62B
-
646.00M
-
1.11B
42.37B
-
44.62B
1.09B
1.41B
650.00M
-
1.87B
4.36B
21.75B
6.20B
31.50B
-
35.86B
57.00M
- 1317000.00K
- 16000.0K
-
March 31, 2022 at 6:00:00 AM
9.06B
8.76B
44.62B
-
23.16B
22.9B
6.00M
- 69000.00K
- 592000.00K
- 1046000.00K
-
-
- 222000.00K
304.00M
- 964000.00K
-
- 1201000.00K
310.00M
1.51B
355.00M
- 520000.00K
- 165000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
FE
2023
2024
2025
2026
2027
$41.31
$67.65
$69.66
$71.74
$73.87