Bank Of America Upgrades FirstEnergy To Buy Following Meeting With Management - FirstEnergy (NYSE:FE)

Bank of America upgraded

FirstEnergy Corp.FE

to Buy from Neutral, lowering its price target to $40 from $41. According to the analysts, their view of a strategic push toward a more regulated-like business focus was confirmed after meeting with the company's management last week.

"With new CEO Chuck Jones at the helm, the company appears poised to discuss initiatives that could reduce operating expenses," said the analysts, noting the company spends roughly $2.6 billion in fuel/commodity purchases, operating expenses and corporate spending.

They believe FirstEnergy will aim to reduce this by roughly 5–10 percent over the next one to two years, with most of this from the competitive side.

"We find FirstEnergy's focus on balance sheet repair, deregulated stabilization, and regulated growth to be a welcome shift. Prior utilities shifting from deregulation (Dominion, Duke, AEP to name a few) have tended to see boosted relative valuations and improved financials since the last recession," wrote Bank of America.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Market News and Data brought to you by Benzinga APIs