FirstEnergy Corp. (FE) Intrinsic Value & DCF Valuation
Regulated Electric · NYSE
Current Price
$49.13
Intrinsic Value
$57.04
+13.9% margin of safety
What Is FirstEnergy Corp.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of FirstEnergy Corp. (FE) at $57.04 per share, compared with a market price of $49.13, a margin of safety of +13.9%. The base case assumes 7.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $45.69 to $70.1. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is FirstEnergy Corp. (FE) Undervalued?
At $49.13, FE trades about 13.9% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Regulated Monopoly Infrastructure
FirstEnergy operates as a regulated utility, granting it exclusive rights to provide electricity within its service territories. This creates a natural monopoly, limiting direct competition for its core services.
↑High Capital Intensity
The electric utility industry requires massive, ongoing investment in infrastructure like power lines and substations. This high barrier to entry deters new competitors from entering the market.
↑Essential Service Demand
Electricity is a fundamental necessity for homes and businesses. This consistent and inelastic demand provides a stable revenue base, even during economic downturns.
INVESTMENT RISKS
↓Aging Infrastructure and Capital Expenditures
Significant ongoing investment is required to maintain and upgrade FirstEnergy's aging grid. Unexpected failures or the need for accelerated upgrades could strain financial resources.
↓Environmental Regulations and Transition Costs
Increasingly stringent environmental regulations and the transition to cleaner energy sources necessitate substantial capital outlays. These can impact operational costs and future investment strategies.
↓Extreme Weather Events
FirstEnergy's infrastructure is vulnerable to damage from severe weather, such as storms and heatwaves. Such events can lead to costly repairs, service disruptions, and reputational damage.
Base case
FE base case valuation
Intrinsic Value
$57.04
Margin of safety
+13.9%
Expected annual return
+3.0%
Base case assumptions: 7.7% annual growth, 10.0% discount rate, 18x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the FE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for FirstEnergy Corp. respond.
Open DCF Calculator for FECompany Overview
FirstEnergy Corp. is an American utility company that, through its subsidiaries, provides comprehensive electricity services, encompassing generation, transmission, and distribution throughout the United States. Its operations are structured into Regulated Distribution and Regulated Transmission segments. The company leverages a diverse portfolio of power sources, operating facilities that produce electricity from coal, nuclear, hydroelectric, natural gas, wind, and solar technologies. Its vast infrastructure includes 24,074 circuit miles of overhead and underground transmission lines, complemented by an extensive electric distribution network featuring 273,295 miles of overhead pole lines and underground conduits for primary, secondary, and street lighting circuits. FirstEnergy serves approximately 6 million customers across six states: Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. The corporation was established in 1996 and is based in Akron, Ohio.
Financial Metrics — FE Stock Valuation Data
Revenue/Share (TTM)
$27.38
FCF/Share (TTM)
$2.73
ROIC (TTM)
61.0%
ROE (TTM)
8.5%
P/FCF
18.0x
EV/EBITDA
12.0x
FCF Yield
5.55%
Debt/Equity
2.13x
On a trailing twelve-month basis, FE generates free cash flow per share of $2.73 alongside a ROIC of 61.0%, both central inputs for a DCF valuation. Its P/FCF ratio of 18.0x and FCF yield of 5.55% then frame how FE is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of FE?
FirstEnergy Corp. currently generates $2.73 in free cash flow per share. At the current price of $49.13, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is FE undervalued?
FE trades at a P/FCF ratio of 18.0x with a free cash flow yield of 5.55%. This P/FCF is in a moderate range. However, whether FE is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value FE stock using DCF?
To perform a DCF valuation on FirstEnergy Corp.: (1) Start with the trailing free cash flow per share ($2.73) as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting FE's risk profile — with a debt-to-equity of 2.13x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to FE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For FirstEnergy Corp., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Regulated Electric trends, then discounting those amounts to today's dollars. FE's ROIC of 61.0% reflects how efficiently the company converts invested capital into profit.
How does WACC affect FE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For FE, with a debt-to-equity ratio of 2.13x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See FE PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Utilities valuationsDCF and P/E value FE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.