Citi Increases PT on FirstEnergy Corporation to $46, Maintains Hold (FE)

Citi increased its price target on FirstEnergy Corporation FE from $41 to $46. At the same time, Citi left its rating unchanged at Hold. In a research report published today, Citi states, "We are increasing our 12 month target price for FE to $46/share from $41/share. The increase in our valuation is solely predicated on a higher 2014/15 RTO clearing price of $125.99/MW-day versus our model estimate of $30/MW-day. This much higher clearing price effectively increased our capacity NPV for the unregulated merchant segment to $3.5B from $1B by increasing our terminal year RTO price assumption to $150/MW-day from $66/MW-day." On Friday, FirstEnergy lost 2.36% of its value to end the week at $42.53.