UPDATE: Jefferies Downgrades FirstEnergy to Underperform on Regulatory Risk

Jefferies reduces its rating on FirstEnergy FE from Hold to Underperform and reduces its price target from $48 to $40. Jefferies comments, "We are downgrading FirstEnergy to Underperform from Hold based on increasing regulatory risk in New Jersey and Ohio. Next month regulators are expected to rule in New Jersey on whether to issue a show cause order requiring JCPL to file a rate case. In Ohio, the company's ESP 3 stipulation is running into increasing opposition over the continuation and expansion of the delivery capital recovery rider." FE closed at $47.69 on Tuesday.