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Investing.com - UBS has reiterated its Buy rating on Edison International (NYSE:EIX) with a price target of $68.00, according to a research note published Wednesday. The stock, currently trading at a P/E ratio of 8.31 and offering a 5.87% dividend yield, appears undervalued according to InvestingPro’s Fair Value analysis.
UBS analyst Gregg Orrill noted that while the proposed decision in Edison’s rate case authorizes rate base within expectations, oral arguments and comments filed indicate potential funding shortfalls that could lead to underinvestment if not addressed.
The analyst expressed belief that there is "some scope for improvement" in the proposed decision, and that completion of the rate case will reduce uncertainty for the utility company.
UBS identified several potential catalysts for Edison International, including a possible Woolsey fire settlement and the passage of wildfire legislation, which the firm characterized as "Wildfire Fund Clarity a Potential Positive."
The research note mentioned that Edison stated during its second-quarter earnings call that it might wait several weeks after the rate case decision before providing guidance, with UBS believing the stock currently prices in a $2.0 billion equity issuance at 9 times the firm’s 2027 estimated earnings per share of $6.47.
In other recent news, Edison International released its second-quarter earnings for 2025, which revealed a notable miss in earnings per share (EPS) compared to analysts’ forecasts. The company reported an EPS of $0.97, which was below the anticipated $1.28. However, Edison International’s revenue exceeded expectations, achieving $4.54 billion against a forecast of $4.44 billion. These recent developments indicate a mixed performance for the company, with revenue surpassing predictions while earnings fell short. The earnings miss may have contributed to investor concerns. Despite the EPS miss, the company’s ability to outperform revenue expectations is a positive aspect. Investors and analysts will likely be monitoring how Edison International addresses these earnings challenges in future quarters.
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