Edison International
EIX
$56.75
-1.20%
Edison International is the parent company of Southern California Edison, a regulated electric utility serving approximately 5 million customers across a 50,000-square-mile territory in Southern California, excluding Los Angeles. As a major player in the U.S. utility sector, Edison International is distinct for its scale and its strategic focus on grid modernization and clean energy transition, though it also retains nonutility energy services through Edison Energy. The current investor narrative is dominated by heightened wildfire liability concerns, as recent California legislative inaction on capping utility liability has triggered a sharp selloff and downgrades, casting uncertainty over the company's risk profile and future earnings stability.…
EIX
Edison International
$56.75
Related headlines
Investment Opinion: Should I buy EIX Today?
Rating: Hold. The stock is a high-risk utility with a forward PE of 8.73x, offering a 20.2% upside to the average analyst target of $68.21. However, the unresolved wildfire liability and negative free cash flow justify caution. The consensus recommendation is 'hold,' reflecting balanced views.
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EIX 12-Month Price Forecast
The AI model assesses EIX as neutral with medium confidence. The deep valuation discount is offset by significant wildfire liability risk and negative cash flow. If regulatory relief materializes, the stock could re-rate higher, but current conditions warrant caution. An upgrade to bullish would require positive legislative action or improved cash flow, while a downgrade to bearish would follow new wildfire damages or a dividend cut.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Edison International's 12-month outlook, with a consensus price target around $68.21 and implied upside of +20.2% versus the current price.
Average Target
$68.21
0 analysts
Implied Upside
+20.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$50 - $86
Analyst target range
The target price range spans from a low of $50.00 to a high of $86.00, indicating a wide dispersion of expectations. The low target suggests that some analysts see further downside, possibly due to unmitigated wildfire liability risks, while the high target implies a recovery scenario if the company successfully manages those risks and continues its growth trajectory. Recent institutional ratings show a mix of actions, with no clear trend of upgrades or downgrades, but the wide spread between low and high targets highlights the high uncertainty surrounding the stock's future, driven by regulatory and legal overhangs.
Bulls vs Bears: EIX Investment Factors
Edison International presents a classic high-risk, high-reward scenario. The bull case rests on a deeply discounted valuation (forward PE 8.73x) and robust regulated utility fundamentals, while the bear case is dominated by unresolved wildfire liability that could lead to billions in costs. Currently, bearish evidence is stronger given the recent legislative failure and negative free cash flow, but the market may be overreacting, as the stock trades near its 52-week low. The central tension is whether California will eventually provide liability relief; if it does, the stock could re-rate sharply higher, but if not, further downside is likely.
Bullish
- Revenue growth accelerating: Q1 2026 revenue grew 7.66% YoY to $4.103B, driven by the regulated utility segment. This consistent growth supports rate base expansion and future earnings.
- High gross margin: Gross margin was 76.36% in Q1 2026, reflecting the regulated cost structure and stable cash flows. This provides a solid foundation for profitability.
- Attractive valuation: Forward PE of 8.73x is a steep discount to the utility sector average of 15-20x. Trailing PE of 5.18x is near historical lows, suggesting pessimism is priced in.
- Strong ROE: Return on equity is 25.92%, well above typical utility levels, indicating efficient capital deployment and potential for earnings growth.
Bearish
- Wildfire liability overhang: California's failure to cap wildfire liability caused a 24% crash on Aug 31, 2026. The stock now trades at $56.77, near the 52-week low of $52, reflecting elevated legal risk.
- Earnings volatility: Net income swung from $1.845B in Q4 2025 (one-time gains) to $570M in Q1 2026. Operating margin dropped to 26.18% from 55.99% a year ago, indicating instability.
- Negative free cash flow: TTM free cash flow is -$643M, highlighting cash burn due to capital expenditures and wildfire mitigation costs. This could pressure dividends or increase debt.
- High leverage: Debt-to-equity ratio is 2.42, and current ratio is 0.73, indicating liquidity stress. High debt amplifies financial risk if liabilities materialize.
EIX Technical Analysis
Edison International's stock has been in a pronounced downtrend over the past three months, with the price falling 22.58% and now trading at $56.77, near the lower end of its 52-week range (52.0 to 81.62). The stock is currently at approximately 69.5% of its 52-week range, indicating it is closer to the lows than the highs, which often signals either a value opportunity or a falling knife depending on the underlying fundamentals. The 1-year price change is +3.84%, but this masks the recent sharp decline, as the stock has given back most of its gains from earlier in the year.
Beta
0.61
0.61x market volatility
Max Drawdown
-32.8%
Largest decline past year
52-Week Range
$52-$82
Price range past year
Annual Return
+2.1%
Cumulative gain past year
| Period | EIX Return | S&P 500 |
|---|---|---|
| 1m | -18.8% | -1.6% |
| 3m | -22.2% | +2.2% |
| 6m | -20.9% | +14.4% |
| 1y | +2.1% | +16.2% |
| ytd | -6.9% | +11.1% |
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EIX Fundamental Analysis
In the most recent quarter (Q1 2026, ended March 31, 2026), Edison International reported revenue of $4.103 billion, up 7.66% year-over-year, driven primarily by its Electric Utility segment which contributed $3.731 billion of the total. However, revenue growth has been uneven, with Q4 2025 revenue of $5.213 billion and Q3 2025 revenue of $5.75 billion, indicating some quarterly volatility. The company's net income for Q1 2026 was $570 million, with a net margin of 13.89%, but this is a significant drop from the $1.845 billion net income in Q4 2025, which included a one-time gain. Gross margin for Q1 2026 was a robust 76.36%, reflecting the regulated utility's cost structure, but operating margin was 26.18%, down from the unusually high 55.99% in Q1 2025.
Quarterly Revenue
$4.1B
2026-03
Revenue YoY Growth
+7.7%
YoY Comparison
Gross Margin
76.4%
Latest Quarter
Free Cash Flow
$-643000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is EIX Overvalued?
Given that Edison International has positive net income, the PE ratio is the appropriate primary valuation metric. The trailing PE is 5.18x, while the forward PE is 8.73x, indicating that the market expects earnings to decline from the trailing twelve months, which included one-time gains. The gap between trailing and forward PE suggests that the market is pricing in a normalization of earnings, which is consistent with the recent wildfire liability concerns. Compared to the industry average, Edison's forward PE of 8.73x is at a significant discount to the typical utility sector PE of around 15-20x, reflecting the market's perception of higher risk due to wildfire exposure. Historically, the stock's PE has ranged from as low as 3.13x in Q4 2025 to over 48x in Q1 2022, and the current trailing PE of 5.18x is near the lower end of that range, suggesting that the market is pricing in substantial pessimism.
PE
5.2x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 3x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
7.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant. The company carries a debt-to-equity ratio of 2.42, and its current ratio of 0.73 indicates potential liquidity issues. TTM free cash flow is negative at -$643 million, which could force the company to cut its dividend (yield 5.96%) or increase borrowing. Earnings are volatile, with net income swinging from $1.845 billion in Q4 2025 to $570 million in Q1 2026, reflecting one-time items and operational instability. The high payout ratio of 30.2% may be unsustainable if cash flows remain negative.