Will Revenue Improvement Strengthen FirstEnergy's Long-Term Outlook?

FirstEnergy Corp. FE is benefiting from higher revenues, supported by increased rates, customer demand and investments in its regulated operations. This revenue growth, combined with disciplined cost management and rate-base expansion, is strengthening its operating performance.

FirstEnergy’s second-quarter 2026 revenues rose 8.8% year over year to $3.68 billion from $3.38 billion, while operating income climbed 23.8% to $677 million from $547 million. The improvement reflects stronger revenues and continued growth in regulated investment, which helped offset higher planned operating and maintenance expenses.

The company is benefiting from accelerating data-center demand, with total contracted and pipeline demand reaching 24.8 gigawatts (GW), up nearly 30% from the first quarter of 2026, while contracted demand rose 50% to 6.4 GW. Growing customer demand could provide a stronger foundation for FE’s long-term earnings growth. It could create additional transmission and distribution investment opportunities. FirstEnergy is also evaluating new generation investments, particularly in West Virginia.

These developments could support higher electricity usage and increase the need for grid infrastructure over time. FE’s $36 billion Energize365 investment plan through 2030 is expected to drive about 10% compounded annual rate-base growth (CAGR). The company projects its Core Earnings growth near the top end of its 6-8% CAGR target from 2026 to 2030.

Overall, rising electricity demand, rate-base expansion and infrastructure investments could therefore provide additional revenue opportunities and support FE’s long-term earnings growth.

Growing Utility Revenues Support Cost Management

Growing utility revenues can help utilities absorb rising operating, maintenance and financing costs while supporting margins and earnings stability. Higher demand and continued infrastructure investments can further strengthen revenue growth and long-term financial performance.

Evergy EVRG: In the second quarter of 2026, revenues increased 4.4% to $1.50 billion, while operating income rose 10.7% to $380.6 million, supported by regulated investment recovery, stronger demand and higher large-customer revenue.

PPL Corporation PPL: In second-quarter 2026, operating revenues rose 4.2% to $2.11 billion, supported by stronger rate recovery and transmission revenues, while operating income climbed 17%.

The Zacks Rundown on FE

FE’s Earnings Estimates

The Zacks Consensus Estimate for 2026 and 2027 EPS indicates a year-over-year increase of 7.45% and 7.74%, respectively.

Image Source: Zacks Investment Research

FE Stock Trading at a Premium

FE is trading at a premium relative to the industry, with a forward 12-month price-to-earnings of 16.24X compared with the industry average of 15.29X.

Image Source: Zacks Investment Research

FE’s Stock Price Performance

In the past three months, the company’s shares have plunged 0.2% compared with the industry’s 2.9% fall.

Image Source: Zacks Investment Research

FE’s Zacks Rank

FE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research