FirstEnergy raised to Buy at TD Cowen on data center-driven load growth

[High Voltage Electric Power Lines At Sunset]
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FirstEnergy (FE [https://seekingalpha.com/symbol/FE]) down 1.4% in Friday's trading even as TD Cowen upgraded the electric utility's shares to Buy from Hold with a $53 price target, pointing to positive attributes including lower rates compared to peers, robust transmission investment opportunities, and likely generation needs in West Virginia.

TD analyst Shelby Tucker sees FirstEnergy (FE [https://seekingalpha.com/symbol/FE]) as a differentiated way to participate in data center-driven load growth, not through outsized distribution exposure but as a transmission conduit across PJM Interconnection.

FirstEnergy's (FE [https://seekingalpha.com/symbol/FE]) service territories bridge the supply-abundant western PJM with increasingly constrained eastern load centers, positioning the company to benefit from incremental transmission investment required to move power where it is most needed, Tucker says.

At the same time, the company's regulatory relationships are improving following the SEC settlement, with upcoming West Virginia and Maryland rate cases serving as near-term proof points ahead of the more consequential Ohio filing, the analyst says.

FirstEnergy's (FE [https://seekingalpha.com/symbol/FE]) PJM regulatory risk remains structural, but Tucker believes the underlying opportunity and valuation are compelling enough to justify the risk.

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