FirstEnergy Corp. enters the final days of May with a quiet but meaningful story: short sellers have been stepping back even as the stock gives up ground, and the Street's analyst activity points to a bullish undertone that the price hasn't fully reflected.
Short interest has eased significantly. SI as a percentage of the free float fell from a recent peak near 4.7% in mid-April to 4.2% now — a steady decline of roughly half a percentage point over six weeks. The week-on-week drop is 4.3%, and the one-month fall is 8.7%. That's not a dramatic squeeze narrative, but it is a consistent unwind. Borrow conditions remain extremely loose, with availability at 1,344% — meaning shares available to borrow dwarf the existing short position by a factor of more than thirteen. Cost to borrow has nudged up about 1.3% on the week to 0.50%, but it's still firmly in the "practically free" category for anyone wanting to maintain a short.
Options traders are leaning bullish. The put/call ratio dropped to 0.61 on Friday — 1.5 standard deviations below its 20-day average of 0.65. That's the most call-heavy the options market has been in several weeks, and close to the 52-week low of 0.55. Calls are outpacing puts at the most lopsided reading since the spring, suggesting options positioning has shifted in favour of upside rather than protection.
The analyst picture is broadly supportive, though the stock has drifted 6.4% lower over the past month. TD Cowen upgraded FirstEnergy to Buy on May 15 — even while trimming its target from $56 to $53. That tension (an upgrade paired with a lower target) captures the Street's mood precisely: directional conviction is positive, but the near-term price trajectory is uncertain following the pullback. The mean price target across analysts is $52.23, implying roughly 13% upside from the current $46.39. The factor score on forward EPS growth ranks in the 94th percentile, and the analyst recommendation divergence score ranks 93rd — both pointing to a setup where the Street's optimism is notably above-average relative to the broader universe. The PE has compressed to 16.4x, down about 1.1 turns over the past 30 days, while EV/EBITDA has eased to 10.6x. Neither multiple is stretched for a regulated utility.
The institutional base is well-anchored. Capital Research holds 13.6% of shares, BlackRock and State Street together another 15.5%. Most recently reported positions saw modest additions rather than trims — BlackRock added 881k shares through April, Allspring added 694k. Insider activity is less instructive here: the most recent filed transactions are from March, when the CFO and COO sold shares near $51 — well above the current level. Those sales look more like routine liquidity rather than a directional signal, and the net 90-day figure is skewed by a large equity award to the CEO in late February.
FirstEnergy reports next on July 30. The past two prints produced meaningful negative reactions — a 4.2% and a 1.0% one-day drop respectively — though the five-day aftermath was more severe (down 8.1% and 7.2%). That asymmetry between the immediate move and the multi-day drift is worth noting given the current setup: a stock trading at a discount to analyst targets, with shorts retreating, but a track record of selling off after results. The completion of the $4.8 billion transmission modernization program ahead of schedule, cited in recent weeks, reduces near-term capital intensity and supports the regulated asset base narrative heading into that print. Peer behaviour adds context: PPL and AEP both fell 2.2% on the week, DUK dropped 1.5%, while FirstEnergy posted a flat week — suggesting relative outperformance within the utility sector this week despite the month's broader underperformance.
The July earnings date now acts as the next key reference point: the question is whether the short unwind and options skew toward calls holds into a print that has historically produced multi-day selling pressure.
See the live data behind this article on ORTEX.
Open FE on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.