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Investing.com -- Jefferies downgraded Edison International to Hold from Buy and cut its price target to $57 from $70, given high wildfire-related risk in California and a slower growth profile than peers.
The brokerage highlighted potential liabilities from the Eaton Fire and noted that recent legislative reforms, including Senate Bill 254, offer some relief but are uncertain and could shift costs onto shareholders.
The firm said the 6% dividend yield partially offsets downside risk but does not fully compensate for the elevated wildfire exposure.
Jefferies expects Edison’s EPS to grow 5-7% through 2028 but warned of deceleration beyond 2029 as wildfire liabilities mount and potential equity issuance may be needed.
California legislative reform in 2026 is seen as the key potential upside, but Jefferies said outcomes are unpredictable in an election year and a change in leadership could reduce support for utilities.
“We do not see shares as offering compelling risk/reward with higher percentage wildfire risk than peer PCG, a slower growth profile, and Eaton Fire liability exposure,” analysts at Jefferies said.
Peer Pacific Gas & Electric offers higher growth and more predictable estimates, making it more attractive for investors betting on regulatory improvements.
The downgrade reflects caution over Edison’s ability to re-rate positively in the near term amid wildfire risk, liability exposure, and slower EPS growth relative to peers.