UPDATE: Jefferies Downgrades FirstEnergy to Underperforms on Rating Agency Headwinds

Jefferies downgraded FirstEnergy Corporation

from Hold to Underperform and lowers the price target from $42.50 to $33.50. Jefferies noted, "We are downgrading FirstEnergy to Underperform based on growing rating agency pressure to enhance the company's credit metrics and regulatory exposure in rate proceedings in West Virginia and New Jersey. FirstEnergy and FES credit metrics excluding the ATSI premium capacity payments are not expected to improve without incremental balance sheet improvement. … Jefferies believes that an investment grade rating is necessary for supply counterparties to sign contracts with the company in its retail business." FirstEnergy closed at $33.50 on Friday.