Jefferies cuts Hawaiian Electric target to $10 from $10.50

On Monday, Jefferies analyst Julian Dumoulin-Smith adjusted the price target for Hawaiian Electric (NYSE:HE) shares, reducing it to $10.00 from the previous $10.50, while maintaining a Hold rating on the stock. Currently trading at $8.94, the stock has experienced significant pressure, trading well below its 52-week high of $18.19. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics. The analyst's remarks indicate an anticipation of significant developments and potential volatility for the company in the near future, particularly as it approaches its fourth-quarter 2024 update call.

The focus of the upcoming call is expected to be on Hawaiian Electric's execution challenges, with several pivotal events converging in May. Dumoulin-Smith suggests that the first or second-quarter calls might present a better opportunity for the company to reinstate guidance, given the current uncertainties. InvestingPro data reveals the company's weak financial health score of 1.67, though it maintains strong liquidity with a current ratio of 9.09.

The complexities of the legislative process, the pending decision from the state Supreme Court, internal organizational restructuring, and the need for clarity on holding company costs were all cited as contributing factors to the current situation. Additionally, the analyst posed a question regarding whether the California fires would prompt Hawaii to take new legislative action.

Hawaiian Electric's stock performance and investor expectations may be influenced by the outcomes of these factors. The company's management and stakeholders are likely to pay close attention to the developments mentioned by Dumoulin-Smith as they could have significant implications for the company's strategic direction and financial health.

Investors and market watchers will be looking to the company's forthcoming quarterly calls for further insights into Hawaiian Electric's operational progress and strategic responses to both internal and external challenges as outlined by the Jefferies analyst. While currently unprofitable, InvestingPro analysts project a return to profitability this year with an EPS forecast of $1.24. Subscribers can access additional insights and 6 more ProTips about Hawaiian Electric through the comprehensive Pro Research Report, available exclusively on the platform.

In other recent news, Hawaiian Electric Industries Inc . (HEI) experienced significant developments in its financial performance and strategic direction. The company's recent third-quarter earnings call revealed a consolidated net loss of $104.4 million, primarily due to one-time wildfire liabilities and an asset impairment charge. However, excluding these items, the core net income was reported to be $52.2 million.

In response to the Maui wildfires, HEI has agreed to a settlement amounting to $1.99 billion, to be paid in four equal installments beginning in late 2025. To mitigate future risks, the company has also implemented a public safety power shutoff program and other advanced technologies.

An analyst from Jefferies recently gave Hawaiian Electric a Hold rating, adjusting the company's financial projections for fiscal years 2025 and 2026. The revisions took into account recent mergers, acquisitions, and divestitures, with a slight reduction in the FY25 EBITDA estimate and an increase in the FY26 earnings per share estimate.

Despite the Hold rating, the analyst increased the price target from $83 to $85, reflecting a modest change in the company's portfolio composition towards sectors with higher margins and growth potential. These recent developments underscore Hawaiian Electric's commitment to financial stability and readiness to address future challenges.

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