FE Shorts Build as Peers Rally and Analysts Trim Targets

FirstEnergy heads into its October 23 Q3 print as the one regulated utility that short sellers are adding to while the rest of the sector climbs.

The divergence from peers is striking. On Monday alone, PPL, EXC, DUK, AEP, and SO each gained 2% or more. FirstEnergy fell 2%. Over the past week, close peers are up 2% to nearly 6%. FE is essentially flat, down 0.2%. That gap matters because these names move together most of the time, PPL carries an 82% price correlation with FE over the measured period. When the group runs and FE does not, something specific is weighing on the stock.

Short interest is rising into the print. Bears have added to positions over the past month, with SI climbing to 5.3% of free float, up roughly 6.4% over the past week alone. That is not an extreme level, but the direction of travel heading into an earnings date is notable. The borrow market remains relaxed: cost to borrow is 0.45%, down nearly 10% on the week, and availability is loose at over 1,100% of short interest, meaning there is no supply constraint on new short positions. Options tell a different story. The put/call ratio has actually eased to 0.53, well below its 20-day average of 0.60 and near the low end of its 52-week range. Derivatives traders are not hedging aggressively into this print, even as short sellers add. The two signals point in opposite directions.

Analysts have been trimming targets in a tightening cluster ahead of results. JP Morgan cut its target to $50 from $52 on Sunday while keeping a Neutral rating. Barclays lowered to $49 from $54 last week, still at Overweight. Morgan Stanley has cut twice since August, now also at $49 with an Overweight. The consensus mean sits at $51.25, implying roughly 13% upside from the $45.25 close. The bull case rests on the company's forward earnings trajectory: the 12-month forward EPS growth factor ranks in the 79th percentile, and analyst recommendation divergence ranks in the 90th percentile, a signal that the spread between optimists and pessimists is wide. Bears can point to a utility trading through an awkward patch: the stock is flat over a month, slightly negative over a year, while peers have caught a tailwind, and a pattern of modest post-earnings weakness has emerged over recent quarters, with the previous three prints each followed by a negative five-day return averaging around 3%.

One ownership detail worth noting: Stephen Schwarzman of Blackstone filed a Schedule 13D on FirstEnergy in August 2025, an activist-flagged filing. Blackstone held just under 5% as of its last disclosure. A 13D signals potential intent to influence, rather than passive ownership. As always with 13D/G disclosures, stakes are as-last-disclosed around the 5% threshold, and a holder dropping below 5% need not file again. Whether that position remains intact is unknown, but the filing is on the register and is the most structurally newsworthy ownership fact heading into the print.

The earnings report will test whether FirstEnergy can close the performance gap with its peer group, or whether the combination of rising short interest, trimmed analyst targets, and a streak of post-earnings softness reflects something more persistent about the company's near-term delivery.