Edison International’s Price Target Raised at Argus

Argus analysts raised their price target for Edison International (NYSE:EIX) to $97, up from $82, while maintaining a Buy rating on the stock.

The analysts’ positive outlook is driven by the strong performance and growth potential of Edison International's subsidiary, Southern California Edison (SCE). They expect the electric utility sector to experience solid growth in 2024, especially as interest rates are predicted to decline. The company enjoys a favorable regulatory environment, a healthy balance sheet, and a large residential customer base in Southern California’s suburbs, which further strengthens its prospects.

Edison International is a leader in renewable energy, with a substantial portion of its electricity coming from nuclear, solar, wind, and hydropower. The company has eliminated coal from its operations and benefits from California's robust electric vehicle (EV) market, which is expected to increase electricity demand. While Edison has faced legal challenges and incurred high costs due to wildfire damage in the past, including ongoing claims from the 2018 fires, it has already reached a settlement with California regulators. The company is also working to recover additional wildfire-related costs, which could significantly boost earnings in 2024 and 2025 if regulatory approval is granted.

The analysts view Edison as attractively valued compared to its peers, particularly in terms of price-to-earnings (P/E), price-to-sales, and PEG ratios. Additionally, the stock offers an above-average dividend yield of 3.6%, making it an appealing investment opportunity within the utility sector.