UBS maintains Buy on Edison stock with $65 target

Tuesday, Edison International (NYSE:EIX) shares maintained a Buy rating from UBS, with a steady price target of $65.00. The rating aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $50.50 to $86.00. Currently trading at a P/E ratio of 8.18, the stock appears undervalued according to InvestingPro’s Fair Value analysis. Analyst Gregg Orrill highlighted the company’s advancements in its wildfire mitigation efforts, noting the recent submission of its 2026-2028 update to the plan. Orrill pointed out that the market has already priced in a liability exposure of $2.5 billion to $3.0 billion related to the Eaton (NYSE:ETN) fire, with no evidence of imprudence. Despite the potential significant impact on the $21 billion wildfire fund, Edison’s liability is limited to $3.9 billion, conditional on the company’s prudent actions.

Orrill mentioned the possibility of new legislation that could influence liability caps and other wildfire-related measures as the legislative session moves toward its conclusion on September 12. He remains optimistic about Edison’s stock, suggesting that it could rerate to a 30% discount on the price-to-earnings ratio compared to the utility group. The company maintains strong shareholder returns with a 5.71% dividend yield and has maintained dividend payments for 22 consecutive years, according to InvestingPro data. Despite a challenging six-month period with a -30.89% return, Edison maintains a GOOD financial health score. This outlook is based on UBS’s forecast of a $6.10 EPS for Edison in 2027.

The UBS analysis includes several potential catalysts for Edison’s stock. These catalysts encompass the expected $1.6 billion securitization issuance in the fourth quarter of 2025, the completion of a rate case in the second quarter of 2025, and a potential settlement of the Woolsey fire claims. The timeline for the Woolsey fire settlement process includes the submission of intervenor testimony on June 3 and a motion for consideration of a settlement on August 12.

Investors and stakeholders in Edison International will be watching these developments closely as they could have a significant influence on the company’s financial performance and stock valuation in the coming months and years. For deeper insights into Edison International’s financial health, valuation metrics, and growth prospects, InvestingPro offers comprehensive research reports with expert analysis and actionable intelligence, available as part of its coverage of 1,400+ US equities.

In other recent news, Edison International reported its Q1 2025 earnings, revealing an earnings per share (EPS) of $1.37, which fell short of the forecasted $1.41. The company’s revenue for the quarter also missed expectations, coming in at $3.81 billion against a forecast of $4.4 billion. Meanwhile, Evercore ISI analyst Durgesh Chopra raised the price target for Edison International shares to $61 from $56, maintaining an Outperform rating, citing optimism around enhanced wildfire legislation in California. On a different front, Fitch Ratings placed Edison International and Southern California Edison on a Rating Watch Negative due to the potential involvement of SCE equipment in the Eaton Fire, which could lead to significant liabilities. The California Public Utilities Commission has approved SCE’s settlement of claims related to past fires, allowing recovery of about $1.6 billion of the $2.7 billion costs initially requested. Edison International remains confident in its 2025 EPS guidance range of $5.94 to $6.34, expecting a 5-7% annual EPS growth through 2028. The company continues to focus on infrastructure improvements and regulatory engagement, particularly in California’s utility market.

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