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On Monday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Edison International (NYSE:EIX) shares, reducing the price target to $66 from the previous $75, while maintaining an Outperform rating on the stock. The revision follows the company’s announcement of its full-year 2024 results on Sunday. The stock, currently trading at $54.44, has experienced significant pressure, falling over 36% in the past six months. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics.
Edison International’s financial performance has been overshadowed by concerns related to the recent Los Angeles fires and the ongoing discussions about legislative and regulatory responses to the damages incurred. During the earnings call, Edison International’s management discussed the existing wildfire protections under Assembly Bill 1054 but acknowledged the uncertainty surrounding the investigation into the Eaton (NYSE:ETN) fire’s cause. Despite these challenges, InvestingPro data shows the company maintains a robust 6.08% dividend yield and has consistently paid dividends for 22 consecutive years.
Investors were keen to learn about the potential for legislative clarity regarding a mechanism for fund replenishment and an extension of the liability cap. However, details on the timing for such developments were not provided, leaving the situation unresolved.
Mizuho’s analyst highlighted that the updated price target reflects the current market multiples and revised company estimates. Despite the reduction in the price target, the firm’s Outperform rating indicates a continued positive outlook for Edison International’s stock performance.
The analyst’s comments suggest that while there is ongoing concern about the impact of the fires and the associated liabilities, the broader view of the company’s prospects remains optimistic. The California legislature’s future actions could significantly influence the company’s financial position and stock valuation.
In other recent news, Edison International reported its fourth-quarter earnings for 2024, revealing earnings per share (EPS) of $1.05, which fell short of analysts’ projections of $1.08. Despite the earnings miss, the company remains positive about its future, maintaining a 2025 EPS guidance range of $5.94 to $6.34. Edison International continues to focus on grid modernization and wildfire mitigation, essential strategies given the increasing wildfire risks in California. Analysts have not made any changes to their ratings for the company following the earnings announcement. The company has declared a first-quarter 2025 dividend of $0.8275 per share, consistent with its ongoing commitment to shareholder returns. Edison International is also anticipating a decision on its General Rate Case in the first half of 2025, which could influence its financial performance moving forward. The company is actively engaged in discussions with stakeholders regarding legislative solutions to address wildfire risks and ensure financial stability. These developments underscore Edison International’s ongoing efforts to manage operational challenges while maintaining financial resilience.
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