FirstEnergy Corp. (NYSE: FE) shares crashed 23% on Wednesday after the company was subpoenaed in connection with an investigation surrounding Ohio House Bill 6. Ohio House Speaker Larry Householder was also arrested as part of a $60 million federal racketeering case related to the nuclear energy bailout law.Several analysts have weighed in on FirstEnergy shares following the investigation news.Voices From The Street: Wells Fargo analyst Neil Kalton said there's no question FirstEnergy is involved in a troubling sequence of events in Ohio. Kalton said the company is facing both financial risks and risks to its reputation, but the 20%-plus sell-off is likely an overreaction."We think the immediate share price reaction more than discounts the risks related to the bribery investigation," Kalton wrote in a note.KeyBanc analyst Sophie Karp said the FBI affidavit associated with the investigation does not name FirstEnergy and she doesn't believe it's currently looking to indict the company or any of its employees. However, she said there's no question the investigation has created significant uncertainty, and further developments are impossible to predict at this point."As is the case with any utility, frayed political relationships in core jurisdictions can cause lasting damage to the business and take a while to repair," Karp wrote.Morgan Stanley analyst Stephen Byrd said the sell-off in FirstEnergy stock is likely a buying opportunity for long-term investors. However, Byrd said FirstEnergy could potentially lose utility decoupling if HB6 is repealed, and it could have potential fines and penalties if the company is found to be connected to any illegal bribery or corruption.Byrd said FirstEnergy also faces "risk that nuclear support is withdrawn, which in turn might put financial pressure on the owners of the nuclear plants (Energy Harbor) and create some degree of risk thatFE would be liable for any nuclear plant shutdown costs if HB6 were repealed, Energy Harbor decided to shut down the two nuclear plants (Perry and Davis-Besse), and Energy Harbor were unable to cover decommissioning costs."FE Ratings And Price Targets: * Wells Fargo has an Overweight rating and $40 target. * KeyBanc has a Sector Weight rating. * Morgan Stanley has an Overweight rating and $47 target.Related Links:Jacob Wohl Hired By Epstein Associate Ghislaine Maxwell, Daily Mail Reports The Next Wirecard? 20 Things To Watch For To Spot A Massive Market FraudLatest Ratings for FE DateFirmActionFromTo Jul 2020Wells FargoMaintainsOverweight Jul 2020ScotiaBankDowngradesSector OutperformSector Perform Jul 2020GuggenheimDowngradesBuyNeutral View More Analyst Ratings for FE View the Latest Analyst Ratings See more from Benzinga * Snap Sells Off As Losses Grow, But These Analysts Would Buy The Dip * BofA Upgrades Sunnova On Hopes For Solar Tax Credit Extension * Here's How Much Investing ,000 In AMC Entertainment's 2013 IPO Would Be Worth Today(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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