Edison International
EIX
$73.37
-6.81%
Edison International is the parent company of Southern California Edison, a regulated electric utility that distributes electricity to 5 million customers across a 50,000-square-mile area in Southern California. As a dominant player in the regulated electric utility industry, it benefits from a stable customer base and regulatory protections, but its growth is tied to capital investment programs and rate case outcomes. The current investor narrative centers on the company's ability to navigate California's evolving energy policies, wildfire liabilities, and the transition to renewable energy, with recent financial results showing improved profitability and a strong stock price rally.…
EIX
Edison International
$73.37
Investment Opinion: Should I buy EIX Today?
Rating: Hold. The thesis is that Edison International's strong momentum and low trailing P/E are offset by negative free cash flow, high debt, and analyst caution, making the stock fairly valued at current levels. The consensus analyst rating is 'hold' with an average target of $76.32, implying a 4.3% downside.
Supporting Evidence: The trailing P/E of 5.18x is low, but the forward P/E of 12.25x suggests earnings normalization. Revenue grew 7.7% YoY in Q1 2026, and ROE is a robust 25.9%. However, free cash flow is negative, and the debt-to-equity ratio is high at 2.42. The stock trades near its 52-week high, offering limited upside to the average analyst target. The implied upside to the high target of $86.00 is 7.8%, but the low target of $62.00 represents a 22% downside.
Risks & Conditions: The biggest risks are negative free cash flow, high debt, and wildfire liabilities. This Hold would upgrade to Buy if the stock pulls back to the $70 level (near the average target) or if free cash flow turns positive. It would downgrade to Sell if earnings miss estimates significantly or if a major wildfire liability emerges. Overall, the stock appears fairly valued relative to its forward earnings and peer group, with limited upside potential from current levels.
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EIX 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The stock's strong momentum and low trailing P/E are attractive, but the forward P/E suggests limited upside. Negative free cash flow and high debt are key risks. The analyst consensus is cautious, and the stock is near its high. Upside catalysts include regulatory wins and earnings beats, while downside risks include wildfire liabilities and rate hikes. The stance would upgrade to bullish if free cash flow turns positive or if the stock pulls back to a more attractive entry point.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Edison International's 12-month outlook, with a consensus price target around $76.46 and implied upside of +4.2% versus the current price.
Average Target
$76.46
0 analysts
Implied Upside
+4.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$62 - $86
Analyst target range
Edison International is covered by 14 analysts, with a consensus recommendation of 'hold' (mean rating 2.71 on a 1-5 scale). The average target price is $76.32, implying a 4.3% downside from the current price of $79.75. The distribution shows a mix of ratings: Barclays rates it Overweight, B of A Securities rates it Buy, while JP Morgan and Truist rate it Neutral, and Morgan Stanley rates it Underweight. The target range spans from a low of $62.00 to a high of $86.00. The high target of $86.00 assumes continued regulatory support and earnings growth, while the low target of $62.00 reflects concerns about wildfire liabilities or regulatory headwinds. Recent rating actions show a downgrade from Seaport Global (Buy to Neutral) and a Sell rating from Ladenburg Thalmann, indicating some bearish sentiment. The wide spread between low and high targets ($24) signals high uncertainty about the stock's future performance, particularly given California's regulatory environment and wildfire risks.
Bulls vs Bears: EIX Investment Factors
Edison International presents a mixed picture: strong price momentum, low trailing P/E, and high ROE support the bull case, while negative free cash flow, high debt, and analyst caution underpin the bear case. The bull case currently has stronger evidence given the stock's 55% rally and cheap trailing valuation, but the key tension is whether earnings can sustain their recent elevated levels. If earnings normalize as the forward P/E implies, the stock may be fairly valued; if earnings surprise to the upside, the stock could re-rate higher. The single most important factor is the outcome of California's regulatory and wildfire liability landscape, which could either validate the current valuation or trigger a sharp correction.
Bullish
- Strong Price Momentum: EIX has rallied 55.1% over the past year, vastly outperforming the S&P 500's 16.5% gain. The stock is trading near its 52-week high of $80.90, reflecting strong investor confidence in the company's regulated utility business and earnings recovery.
- Low Trailing P/E Attractive: The trailing P/E of 5.18x is near the low end of its historical range (3.13x-48.68x) and appears cheap relative to the forward P/E of 12.25x. This suggests the market is pricing in a normalization of earnings, but if earnings remain strong, the stock could re-rate higher.
- High ROE and Profitability: Edison International boasts a return on equity of 25.9%, well above typical utility levels, indicating efficient use of shareholder capital. Net margin for Q1 2026 was 13.9%, and gross margin was 76.4%, demonstrating strong pricing power and cost control in its regulated operations.
- Regulated Revenue Stability: As the parent of Southern California Edison, EIX benefits from a regulated customer base of 5 million, providing predictable revenue streams. Q1 2026 revenue grew 7.7% YoY to $4.103 billion, driven by rate base growth and capital investment programs.
Bearish
- Negative Free Cash Flow: Free cash flow was negative $112 million in Q1 2026 and negative $643 million over the trailing twelve months, as capital expenditures of $1.539 billion outpaced operating cash flow. This reliance on external financing could pressure the balance sheet if access to capital tightens.
- High Debt-to-Equity Ratio: The debt-to-equity ratio of 2.42 is elevated, reflecting the capital-intensive nature of utility operations but also increasing financial risk. Interest expenses of $524 million in Q1 2026 consumed a significant portion of operating income, leaving less room for error.
- Analyst Consensus Hold with Downside: The average analyst target of $76.32 implies a 4.3% downside from the current price of $79.75. The consensus recommendation is 'hold' (mean rating 2.71), with a wide target range of $62-$86, signaling uncertainty about valuation and regulatory outcomes.
- Wildfire Liability Overhang: California's wildfire risks remain a key concern for utilities. The low analyst target of $62.00 reflects potential liabilities or regulatory headwinds. Any adverse legal or regulatory developments could severely impact the stock, as seen in past utility bankruptcies.
EIX Technical Analysis
Edison International is in a sustained uptrend, with the stock price up 55.1% over the past year, significantly outperforming the S&P 500's 16.5% gain. The current price of $79.75 sits at 98.6% of its 52-week range (high $80.90, low $51.01), indicating the stock is near its highs and reflecting strong momentum, though it may be approaching overbought territory. Short-term momentum is accelerating, with a 1-month price change of +7.5% and a 3-month change of +15.8%, both outpacing the S&P 500's 0.8% and 3.5% gains, respectively. The relative strength index (RSI) is not provided, but the consistent upward movement suggests bullish sentiment, though the 1-month gain is slightly decelerating from the 3-month pace, hinting at a potential consolidation. The 52-week low of $51.01 provides strong support, while resistance is at the 52-week high of $80.90. A breakout above $80.90 would signal further upside, while a breakdown below $51.01 would be a bearish reversal. With a beta of 0.65, the stock is less volatile than the market, making it a lower-risk holding for utility investors.
Beta
—
—
Max Drawdown
-10.4%
Largest decline past year
52-Week Range
$51-$82
Price range past year
Annual Return
+40.8%
Cumulative gain past year
| Period | EIX Return | S&P 500 |
|---|---|---|
| 1m | -0.2% | +0.2% |
| 3m | +5.0% | +3.7% |
| 6m | +17.8% | +8.0% |
| 1y | +40.8% | +18.2% |
| ytd | +20.4% | +9.6% |
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EIX Fundamental Analysis
Revenue growth has been solid, with Q1 2026 revenue of $4.103 billion, up 7.7% year-over-year, driven by the Electric Utility segment which contributed $3.731 billion. Over the trailing twelve months, revenue totaled $19.09 billion, reflecting steady demand from its regulated customer base. However, growth has been uneven, with Q4 2025 revenue surging to $5.213 billion due to seasonal factors, while Q2 2025 saw $4.543 billion. The company is highly profitable, with Q1 2026 net income of $570 million and a net margin of 13.9%, though this is down from the 39.1% net margin in Q1 2025 due to a one-time gain. Gross margin remains strong at 76.4% in Q1 2026, reflecting the utility's cost structure, but operating margin of 26.2% is healthy. Profitability has been volatile, with net income swinging from $1.492 billion in Q1 2025 to $398 million in Q2 2025, but the trend is positive with recent quarters showing improvement. The balance sheet shows a debt-to-equity ratio of 2.42, which is high for a utility but typical given capital-intensive operations. Free cash flow was negative $112 million in Q1 2026 and negative $643 million over the trailing twelve months, as capital expenditures of $1.539 billion outpaced operating cash flow of $1.427 billion. ROE is strong at 25.9%, indicating efficient use of equity, but the reliance on debt financing and negative free cash flow raises concerns about financial flexibility, though regulated utilities often have access to capital markets.
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?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 5.18x, while the forward P/E is 12.25x, a wide gap that suggests the market expects earnings to normalize after a period of elevated profitability. The trailing P/E is low due to high earnings in recent quarters, but the forward P/E implies a more sustainable earnings level. Compared to the industry average (not provided), the stock's P/E of 5.18x appears cheap, but the forward P/E of 12.25x is more in line with utility peers. The P/S ratio of 1.20x is also low, reflecting the utility's high revenue base. Historically, the stock's P/E has ranged from 3.13x (Q4 2025) to 48.68x (Q1 2022), with the current trailing P/E near the low end of its historical range. This suggests the market is pricing in a normalization of earnings, as the recent high profitability may not be sustainable. The P/B ratio of 1.31x is below the historical average of around 1.6x, indicating the stock is trading at a discount to book value relative to its history.
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 & Operational Risks: Edison International's high debt-to-equity ratio of 2.42 and negative free cash flow of -$643 million TTM are significant financial risks. Interest expenses of $524 million in Q1 2026 consumed nearly half of operating income, leaving limited cushion for adverse events. The company's reliance on capital markets for funding could become problematic if interest rates remain elevated or if access to credit tightens. Additionally, earnings volatility is evident: net income swung from $1.492 billion in Q1 2025 to $398 million in Q2 2025, highlighting the impact of one-time items and seasonal factors.
Market & Competitive Risks: The stock's beta of 0.65 indicates lower market sensitivity, but it is not immune to sector rotation or regulatory changes. The forward P/E of 12.25x is in line with utility peers, but any compression could lead to downside. The wide analyst target range ($62-$86) reflects uncertainty about California's regulatory environment and wildfire liabilities. Recent downgrades from Seaport Global (Buy to Neutral) and a Sell rating from Ladenburg Thalmann suggest growing bearish sentiment among analysts. Macro risks include rising interest rates, which increase the cost of debt and make utility dividends less attractive relative to bonds.
Worst-Case Scenario: In a severe scenario, a major wildfire event or adverse regulatory ruling could force Edison International to take large liabilities, similar to PG&E's bankruptcy. The stock could fall to its 52-week low of $51.01, representing a 36% decline from the current price of $79.75. This scenario would likely involve negative earnings revisions, dividend cuts, and a loss of investor confidence. The low analyst target of $62.00 implies a 22% downside, but the worst case could be more severe if the company's financial stability is threatened.
FAQ
The key risks are: 1) Financial risk: high debt-to-equity of 2.42 and negative free cash flow of -$643M TTM, which could pressure the balance sheet. 2) Wildfire liability: California's wildfire risk could lead to significant costs, as seen with other utilities. The low analyst target of $62 reflects this concern. 3) Regulatory risk: adverse rate case decisions could limit earnings growth. 4) Macro risk: rising interest rates could make the dividend less attractive and increase borrowing costs. The most severe risk is a major wildfire event, which could cause a 36% decline to the 52-week low of $51.01.
The 12-month forecast is mixed. The bull case (25% probability) sees the stock reaching $80-$86, driven by regulatory wins and strong earnings. The base case (55% probability) expects the stock to trade around $72-$80, near the average analyst target of $76.32. The bear case (20% probability) sees a decline to $62-$72 due to wildfire liabilities or regulatory headwinds. The most likely scenario is the base case, where earnings normalize and the stock remains range-bound. The AI assessment is neutral, with a medium confidence level.
Based on trailing earnings, EIX appears undervalued with a P/E of 5.18x, but this is due to elevated earnings in recent quarters. The forward P/E of 12.25x is more in line with utility peers and suggests the stock is fairly valued. The P/B ratio of 1.31x is below the historical average of around 1.6x, indicating a discount to book value. The P/S ratio of 1.20x is also low. Overall, the stock is not overvalued, but the market is pricing in a normalization of earnings. If earnings remain strong, the stock could be undervalued; if they decline, the current price may be fair.
Edison International presents a mixed risk/reward profile. The stock has strong momentum, up 55% over the past year, and offers a high dividend yield of 5.96%. However, the average analyst target of $76.32 implies a 4.3% downside from the current price of $79.75, suggesting limited near-term upside. The trailing P/E of 5.18x is low, but the forward P/E of 12.25x indicates the market expects earnings to normalize. For long-term investors seeking income and stability, EIX could be a good buy on pullbacks, especially if the stock falls to the $70 level. However, short-term traders may find better opportunities elsewhere given the limited upside potential and risks from wildfire liabilities and high debt.
EIX is best suited for long-term investment, given its regulated utility business, stable dividend yield of 5.96%, and beta of 0.65, which indicates lower volatility. The stock's 55% rally over the past year suggests it may be near-term overbought, but long-term investors can benefit from dividend income and gradual capital appreciation. Short-term traders may find limited upside given the stock is near its 52-week high and analyst targets imply a slight downside. A minimum holding period of 3-5 years is recommended to ride out regulatory and wildfire cycles.