FirstEnergy Downgraded to Neutral From Buy at Bank of America (FE, AYE)
February 11, 2010 11:16 AM
Shares of FirstEnergy Corp (NYSE: FE) slipped 6% after analysts at Bank of America downgrade the stock on its announcement of acquiring Allegheny Energy, Inc. (NYSE: AYE). The deal, which is will acquire the rival power provider, is valued at roughly $4.7 billion in stock.
The analysts state, "We are downgrading FirstEnergy to Neutral from Buy following this morning’s announcement of the acquisition of Allegheny Energy. We believe that the merger makes logical sense. However, we believe that it will be difficult for the stock to outperform during the regulatory approval process, which will likely be long and difficult."
After commenting on the complicated stories that both companies have, they concluded, "We believe that there will be chances to buy the stock at more attractive levels over time as the merger develops."
