Investing.com -- Ladenburg Thalmann upgraded Edison International (NYSE:EIX) to "neutral" from "sell" given its valuation support following a recent sell-off.
The stock, trading at a 34% discount to P/E estimates, is seen as reflecting worst-case outcomes linked to California wildfire risks.
Ladenburg Thalmann noted uncertainty surrounding the fires' impact, including the California Wildfire Insurance Fund's solvency and Edison’s future earnings. An initial assessment of Southern California Edison’s role in the Eaton (NYSE:ETN) and Hurst fires is not expected until mid-2025.
“At this time, it is too early to discern what the outcomes will be with respect to the impact of the fires on the California Wildfire Insurance Fund solvency and/or the future earnings of Edison International,” Ladenburg Thalmann analyst wrote.
EIX has filed Electrical Incident Reports, and lawsuits allege a potential link between Edison equipment and the fires. Ladenburg adjusted its 2024-2027 EPS estimates to account for share price-driven dilution and set a revised price target of $56.50, based on a sum-of-the-parts valuation approach.