UPDATE: ISI Group Reiterates Hold Rating, Lowers PT on FirstEnergy

In a report published Monday, ISI Group reiterated its Hold rating on FirstEnergy FE, but lowered its price target from $50.00 to $47.00. ISI Group noted, “The biggest negative adjustment to our forecast is a reduction in assumed gross margin earned at FES in '12-'15. We do not believe that FE incorporated a point of view on the direction of wholesale prices in their EPS guidance. We do, however, believe that margins at FES are at risk of coming in below FE's aspirations. Offsetting this negative adjustment is the accretive impact of lower environmental cap-ex, with those dollars re-allocated to accelerate transmission spending on already approved projects. Our forecast declines more in ‘13/'14 than in '15 because we had already assumed compressing competitive energy margins in our forecast.” FirstEnergy closed on Friday at $45.85.