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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
EIX — frequently asked questions
Is Edison International overvalued?
In our latest published analysis dated 2026-10-10, EIX looks meaningfully undervalued. The price recorded at analysis is USD 55,3 versus our fair value of USD 85,3; the high endpoint is presented separately as potential value of USD 115. That implies roughly 54.2% upside to fair value at that date.
Our latest published report, analyzed 2026-10-10, gives EIX a fair value of USD 85,3 and a potential value of USD 115. The conclusion is triangulated across multiple valuation models and weighted by reliability for Edison International's archetype; it is a dated research output, not a live price.
Should I buy EIX now?
Our latest published rating for EIX, analyzed 2026-10-10, is Strong Buy. Edison International looks meaningfully undervalued at the analysis-date price of USD 55,3 versus fair value of USD 85,3; potential value is USD 115. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for EIX?
The dedicated bear-case section in our report analyzed 2026-10-10 documents Edison International's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is EIX's rating?
Our latest published rating for EIX, analyzed 2026-10-10, is Strong Buy, with a published moat assessment of 7/10 (Narrow). It reflects our fair value of USD 85,3, the potential value of USD 115, and the price recorded at analysis (USD 55,3).
Bu rapor henüz çevrilmedi. Çeviri kuyruğu yetiştiğinde birkaç dakika sonra sayfayı yenileyin.
§1 Yönetici özetiEN
30 saniyelik yanıtStrong Buy
Fiyat ve değer karşılaştırması
Fiyat
$55.30
Adil değer
$85.28
Potansiyel değer
$115.34
Tarih
2026-10-09
Neden işe yarayabilir
Compounding regulated rate base equity through $6,515M in annual capital expenditures alongside elimination of California's regulatory discount, driving valuation multiple expansion toward electric utility peer medians.
Görüşümüzü ne değiştirir
Severe wildfire ignition in SCE service territory causing third-party property claims exceeding $2.5B.
We maintain a Strong Buy rating on Edison International as substantial capital deployment into electric grid hardening and clean energy infrastructure compounds regulated rate base value.
The Strong Buy rating signifies that Edison International offers substantial risk-adjusted return potential for long-term equity investors through regulated asset compounding and high cash dividend yields.
As of October 9, 2026, the shares closed at $55.30. This level trades at a 35.2% discount to our Fair value midpoint of $85.28, representing 54.2% implied return, while the upper valuation band indicates Potential value of $115.34.4
The primary risk to this thesis is that catastrophic wildfire liabilities exceed insurance coverage and statutory protections under California Assembly Bill 1054, or that state regulators disallow capital recovery. If wildfire claims overwhelm statutory reserves, the company would be forced to issue dilutive common equity across its $43.54B debt stack, depressing .
The core engine of outperformance is sustained rate base growth. Southern California Edison deployed $6,515M of capital expenditure in FY2025 into wildfire hardening and grid infrastructure. These investments enter the regulated rate base under approved returns on equity, expanding annual operating cash generation and lifting projected diluted earnings per share to $6.50 by FY2027.1,6
Rate Base Capital Compounding
Substantial capital deployment of $6,515M in FY2025 compounds the regulated asset base under state regulatory oversight.6
Exclusive Regional Monopoly
Southern California Edison holds a franchised electric transmission and distribution monopoly insulated from direct utility peer market share displacement.
Valuation Discount Re-Rating
Edison trades at an 8.22 forward P/E versus peer Ameren at 17.62, offering substantial re-rating headroom as wildfire mitigations prove effective.3,4
Kurum tavsiyesi
Edison International is rated Strong Buy based on multi-billion dollar regulated rate base expansion and grid hardening under state regulatory oversight that supports sustainable earnings growth and dividend distributions.
Şirkete genel bakış
The CAISO operates a wholesale energy market primarily in California through which competing electricity generators offer electricity output to retailers, and Southern California Edison has placed its transmission network under CAISO operational control.
Southern California Edison participates in day-ahead and real-time markets to sell generation and procure power for customer load requirements, while preparing to join the Extended Day-Ahead Market scheduled for May 2026 to reduce wholesale price volatility.
§2 Olumsuz senaryoEN
Under combined regulatory disallowances and refinancing stress, a 20% contraction in terminal multiple alongside a 2 percentage point increase in cost of capital impairs equity value. In this environment, annual operating cash flow of $5,800,000,000 fails to fully cover capital deployment of $6,515,000,000, expanding negative free cash flow beyond -$715,000,000 and requiring dilutive debt refinancing across the $43.54B debt stack.
Regulatory disallowances reduce allowable rate base capital additions.6
Sustained high refinancing rates increase interest expense on maturing obligations.4
Wildfire claims exceed statutory insurance and fund buffer capacities.
In the downside path, regulatory disallowances compress authorized returns on equity while elevated debt refinancing costs increase interest expense across the capital structure. Catastrophic wildfire claims breaching statutory fund reserves would necessitate dilutive common equity issuance to maintain investment-grade credit ratings.
Bu tezin bozulabileceği yollar
Catastrophic Wildfire Liabilities Overwhelm Statutory Fund and Force Dilutive Equity Issuance
With total debt of $43,540,000,768 and cash of $158,000,000, claims exceeding $2.5B would deplete the AB 1054 fund buffer, forcing dilutive equity issuance and driving forward P/E toward the bear case multiple.4,6
FV impact
-7.8%
Terminal multiple 20% lower
Trigger
Within 24 months
İzlenecek erken uyarı sinyalleri
Yatırım tezimizi zayıflatacak beş gelişme.
01
Uninsured Wildfire Liability Claims
Claims exceeding statutory fund reserves deplete California Assembly Bill 1054 protections and force dilutive equity financing across the capital structure, impairing common equity per-share compounding and draining cash reserves needed for ongoing utility infrastructure maintenance.
Güncel:Zero unrecovered claims in FY2025
Şu durumda uyarExceeds $1.0B in non-recoverable claims within a 12-month period
Edison International maintains a Narrow economic moat grounded in efficient scale and intangible regulatory licenses. Southern California Edison operates an exclusive electric transmission and distribution monopoly across a 50,000-square-mile territory serving 15 million residents. Replicating this grid infrastructure is economically prohibitive for potential competitors, securing a captive customer base.
While returns on invested capital are capped by regulatory cost-of-service frameworks rather than market pricing power, the franchised model provides highly predictable rate-base compounding. However, ongoing wildfire liability exposures and potential regulatory lag prevent a Wide moat designation.
Ekonomik kâr
Southern California Edison earns regulated returns on invested capital determined by CPUC rate cases, with an authorized return on equity that supports operating income of $7,093M on $19,317M revenue in FY2025.6
7/ 10
Narrow
Sources of advantage
01Efficient Scale — Duplicating SCE's transmission and distribution network across its 50,000 square-mile service territory would require tens of billions in capital, making competitive entry uneconomic.Wide
02Intangible Assets (Regulatory Franchise) — SCE holds an exclusive utility franchise granted by the California Public Utilities Commission, legally insulating its customer base from direct territorial competition by peer utilities.Moderate
Kalkana yönelik bilinen tehditler
Tehdit
Şiddet
Zaman çizelgesi
Hafifletme
Rooftop Solar and Behind-the-Meter Storage Defection
low
3-5 years
California Net Energy Metering reform (NEM 3.0) and fixed-charge rate designs protect utility cost recovery.6
The highlighted cell is Fair value when every assumption sits at its base level ($85.28). Each row and column shows what Fair value becomes when one assumption moves.
Under the base path, Southern California Edison executes its CPUC-authorized capital program, expanding the regulated rate base and achieving consensus earnings progression through FY2027. Supported by stable regulatory returns and covered conductor deployment, the share price converges toward $85.28, delivering an implied return of 54.2% against $55.30.1,6
Rate base capital deployment accelerates above baseline authorized levels.6
Complete elimination of California regulatory valuation discount versus national utility peers.
§7 Kazanç karar ağacıEN
Aştı
Maintain Strong Buy; Reaffirm position sizing and continue monitoring capital expenditure deployment against approved regulatory filings.
Tetikleyici: Diluted earnings per share and CPUC rate base additions tracking above consensus estimates for FY2026 and FY2027 alongside benign wildfire season execution.1
Operating outperformance and rate base expansion confirm regulatory capital recovery without unexpected cost disallowances.
Beklenti içi
Maintain Strong Buy; Hold allocation steady while reinvesting dividends and tracking upcoming general rate case filings.
Tetikleyici: Financial performance and capital deployment match consensus expectations for FY2026 and FY2027.1
Predictable cost-of-service ratemaking delivers steady earnings growth aligned with the multi-year rate base trajectory.
Altında kaldı
Downgrade the rating; Reassess exposure and evaluate regulatory filing adjustments prior to allocating additional capital.
Tetikleyici: Material earnings shortfalls driven by regulatory disallowances or unexpected financing cost escalation on maturing debt.
Significant disallowances or debt cost spikes erode equity returns and delay deleveraging milestones.
Kazanç kalitesi
Cash conversion—the process of turning reported net earnings into actual operating cash flow—is supported by regulated cost-of-service ratemaking, where authorized rates permit predictable expense recovery and fuel balancing accounts smooth out temporary timing differences over time.6
Tahminlerin yönü
Consensus estimates post-earnings have remained broadly stable, reflecting predictable CPUC rate base additions and steady execution against multi-year capital plans.1
Açıklama öncesi izlenecek metrikler
01
Metrik:
CPUC Rate Base Capital Authorization
MevcutCapital deployment proceeds on schedule with authorized regulatory plans.
Neden önemli
Approved capital deployment directly expands rate base equity, increasing authorized operating earnings and per-share compounding.6
02
Metrik:
California Wildfire Fund Longevity
MevcutFund remains operational with annual safety certifications intact.
Neden önemli
Preserving statutory fund reserves prevents catastrophic liability claims from diluting common equity value.
Management directs capital primarily to rate base growth, allocating $6,515M to capex in FY2025, with approximately 50% ($3,258M) representing growth investments above annual depreciation of $3,237M. Common dividends of $1,274M represent an established payout, while share repurchases of $32M were minimal.
Regulatory lag and multi-year construction programs temporarily depress accounting returns, but completed projects enter the approved rate base at authorized returns on equity.
ROIC stands near 4.91%, trailing the moderate cost of capital of 7.40%, typical of rate-regulated utilities with large non-earning construction work in progress.
Capital Build Compounding Rate Base
FY2025 capex of $6,515M exceeded depreciation of $3,237M by 2.01x.
Expands the regulated asset base, lifting forward earnings power toward FY2027 diluted EPS of $6.50.
Dependence on External Debt Financing
Total debt rose to $43.54B against cash of $158M.
Leaves the company sensitive to refinancing rates, requiring disciplined regulatory cost-of-capital resets.
Son gelir$19,3 MrGelir CAGR +%5,6
Faaliyet marjı%36,710 mali dönem
Son serbest nakit akışı-$715 MnFY2025
Net borç$37,8 MrFY2025
Gelir tablosu dökümüİşletme ölçeğinin raporlanan kâra nasıl dönüştüğü.
StockMarketAgent.AI
Gelir$19,3 MrSatışların maliyeti−$8,1 MrBrüt kâr$11,2 MrFaaliyet giderleri−$4,1 MrFaaliyet kârı$7,1 MrFaaliyet dışı kalemler ve vergiler−$2,6 MrNet kâr$4,5 Mr
Finansal geçmiş verileri
Gelir
$19.317.000.000
Satışların maliyeti
$8.146.000.000
Brüt kâr
$11.171.000.000
Faaliyet giderleri
$4.078.000.000
Faaliyet kârı
$7.093.000.000
Faaliyet dışı kalemler ve vergiler
-$2.634.000.000
Net kâr
$4.459.000.000
Bilanço özetiRaporlanan varlıkların seçili dönemde nasıl tutulduğu ve finanse edildiği.
Edison International (EIX) trades at 8.2x forward earnings against a peer median of 16.4x. Its EV/EBITDA of 7.4x compares with a peer median of 12.8x. The comparison uses 4 peers: DTE Energy Company, Ameren Corporation, Eversource Energy and CenterPoint Energy Inc., as of 2026-10-10.
§10 Sektör ve döngüEN
Döngü aşaması
Expansion
The regulated utility industry is in an active capital expansion phase, characterized by an industry capex-to-revenue ratio of 33.6% and capex-to-depreciation of 3.15. Edison's FY2025 capex of $6,515M represents 33.7% of revenue and 2.01x depreciation.6
Yükseliş döngüsü
Accelerating demand for transportation electrification, clean power integration, and data center load growth expands rate base investment opportunities.
Düşüş döngüsü
Higher refinancing yields across utility debt stacks and customer rate fatigue create regulatory pushback against rate increases.
Uzun vadeli eğilimler
Eğilim
Etki
Not
Grid Modernization and Wildfire Hardening
positive
Mandated system hardening into covered conductor expands rate base investments under authorized returns.
Economy-Wide Electrification
positive
Vehicle and building electrification increases long-term electric throughput and necessitates distribution grid upgrades.
Konumlandırma
Southern California Edison is well positioned as an essential wires-only transmission and distribution utility, capturing regulated returns without commodity merchant exposure.
§11 Pozisyon yönetimiEN
Pozisyon büyüklüğü
4-6%
Supported by a Strong Buy house rating and an attractive dividend yield, reflecting predictable regulated utility cash flows.
Risk
Maintain portfolio sizing discipline to limit single-utility concentration, capping total exposure at 6% of equity allocation given California wildfire liability dynamics and interest rate sensitivity across the $43.54B debt stack.
Disallowance exceeding $500M or 10% of requested capex
Reduce position weight by 2% if CPUC disallows more than $500M of requested capital investments.6
Uninsured Wildfire Liability
Claims exceeding $1.0B in a single fire season
§12 Yatırımcı bakış açılarıEN
Income and Total Return Investor
Buy
Attractive dividend yield supported by a regulated cost-of-service utility model with 54.2% implied return to Fair value of $85.28.
Value Investor
Buy
Shares trade at an 8.22 forward P/E, representing an unwarranted discount to peer Ameren at 17.62 despite robust operating cash flows of $5,800M.3,4,6
Risk-Averse Defensive Investor
Hold
Substantial leverage with $43.54B total debt and catastrophic wildfire risks require strict monitoring of AB 1054 statutory fund stability before allocating capital.4
§14 Nihai tavsiyeEN
Eylem
Güçlü Al
Edison International presents an attractive risk-adjusted investment opportunity, combining an established dividend yield with 54.2% upside to our Fair value midpoint of $85.28.
Accelerated grid hardening and statutory wildfire protections insulate core operations while multi-billion dollar capital deployment compounds the regulated rate base toward FY2027 diluted EPS of $6.50.
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Sources
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Sustained Elevated Refinancing Rates Escalating Debt Service Across $43.5B Stack
EIX carries $43.54B of total debt with a pre-tax cost of debt of 6.22%; refinancing maturing debt above 7.5% increases annual interest burden and elevates strict cost of equity.2,4
FV impact
-17.5%
Cost of capital 2 points higher
Trigger
Within 36 months
CPUC Rate Case Disallowance and Authorized ROE Compression
Regulatory friction resulting in capital disallowances on the $6,515M annual capex program or an authorized ROE reduction below 9.5% would compress forward EPS below consensus targets of $6.12 in FY2026 and $6.50 in FY2027.1,6
FV impact
-5.7%
The analyst's bear scenario path and multiple as the base case
Trigger
Within 18 months
Sustained high borrowing costs across the $43.54B debt stack increase annual interest expenses ahead of regulatory rate case recovery, compressing earnings per share and reducing discretionary cash flow available for dividend coverage and capital programs.
Güncel:6.22% as of October 10, 2026
Şu durumda uyarExceeds 7.50% on new debt issuances over 24 months
A lower regulatory authorized return directly lowers allowable earnings across the rate base, cutting net operating profit and restricting future earnings growth below consensus expectations for FY2026 and FY2027.
Güncel:Authorized return supporting FY2025 operating income of $7,093M
Şu durumda uyarFalls below 9.50% in the next general rate case
Wider cash flow deficits from heavy grid reinvestment force reliance on external debt or equity markets during elevated interest rate regimes, increasing borrowing expenses and creating potential dilution risk for existing equity shareholders.
Güncel:-$715M in FY2025
Şu durumda uyarDeficit widens beyond -$2.0B annually through FY2027
Accelerated retail load growth from electric vehicle adoption across Southern California.
In the bull path, rapid regional transportation electrification accelerates customer demand and expands rate base investment opportunities. Flawless wildfire mitigation execution eliminates California regulatory valuation discounts, driving the share price toward $115.34 for an implied return of 108.6%.1
