Firstenergy Corp. (XNYS:FE) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

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:

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):

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%

RISK CONCERN

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