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Edison International (EIX)
:EIX

Edison International (EIX) AI Stock Analysis

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EI

Edison International

(NYSE:EIX)

Rating:71Outperform
Price Target:
$62.00
▲( 8.89% Upside)
Edison International shows a stable financial position with strong growth potential, underpinned by solid revenue growth and a robust dividend yield. While technical analysis suggests a cautious outlook, recent corporate events and earnings call insights reflect strategic initiatives and regulatory progress. Challenges remain in managing capital expenditures and regulatory uncertainties.
Positive Factors
Liability Protections
Confidence in AB 1054 providing EIX liability protections if it did cause the fire and maintain a Buy rating.
Valuation
EIX shares currently trade at a very wide P/E discount to the broader group, suggesting potential value for investors.
Negative Factors
Fire Investigation
Management was unable to provide a timeline on when the cause of the Eaton fire could be determined, adding uncertainty for investors.
Wildfire Fund Impact
The potential for a sizable draw-down on the wildfire fund will negatively impact the other California utilities too.

Edison International (EIX) vs. SPDR S&P 500 ETF (SPY)

Edison International Business Overview & Revenue Model

Company DescriptionEdison International, through its subsidiaries, generates and distributes electric power. It delivers electricity to 15 million residential, commercial, industrial, public authorities, agricultural, and other customers across Southern, Central, and Coastal California. The company also provides energy solutions to commercial and industrial users. Its transmission facilities consist of lines ranging from 55 kV to 500 kV and substations; and distribution system consists of approximately 39,000 circuit-miles of overhead lines, approximately 31,000 circuit-miles of underground lines, and 800 substations. The company was founded in 1886 and is headquartered in Rosemead, California.
How the Company Makes MoneyEdison International makes money primarily through its regulated utility operations under Southern California Edison (SCE), which serves as the main revenue driver. The company earns revenue by selling electricity to residential, commercial, industrial, and agricultural customers. SCE's revenue is derived from rates approved by the California Public Utilities Commission, which are designed to cover the costs of providing service and to allow a reasonable return on investment. Additionally, Edison International invests in clean energy projects and technologies that can also contribute to its earnings. The company's revenue is influenced by factors such as electricity demand, regulatory decisions, and investments in infrastructure and renewable energy development.

Edison International Financial Statement Overview

Summary
Edison International displays solid revenue growth and profitability, supported by a strong net profit margin. The balance sheet shows a stable financial position with moderate leverage, although there is a slight increase in liabilities. Cash flow analysis indicates strong operational cash generation, but persistent negative free cash flow suggests the company is heavily investing in its infrastructure.
Income Statement
75
Positive
Edison International's revenue growth rate from 2023 to 2024 was approximately 7.7%, indicating a healthy upward trend. The company exhibits strong gross profit margins consistently at 100% due to the nature of its industry. The net profit margin improved to 8.8% in 2024, an increase from 8.6% in 2023, reflecting better profitability. However, EBIT and EBITDA margins have seen some fluctuations, with an EBIT margin of 16.6% in 2024 compared to 16.1% in 2023. Overall, the income statement shows stability with positive growth trends, though there is room for improvement in operating efficiency.
Balance Sheet
70
Positive
The debt-to-equity ratio stood at 0.30 in 2024, indicating a manageable level of leverage for a utility company. However, the equity ratio decreased from 18.96% in 2023 to 17.61% in 2024, suggesting a slight increase in leverage. Return on Equity improved to 9.93% in 2024 from 9.07% in 2023, signifying better utilization of equity to generate profits. Despite the high debt levels, the company maintains a stable equity base, although the increasing liabilities pose a potential risk.
Cash Flow
65
Positive
Edison's free cash flow remains negative; however, the free cash flow improved from -$2.05 billion in 2023 to -$693 million in 2024. The operating cash flow to net income ratio increased to 3.24 in 2024, demonstrating strong cash generation relative to net income. Nonetheless, the continuous negative free cash flow highlights ongoing capital expenditure needs. The cash flow statement indicates a robust operating performance but also highlights the pressures of heavy capital investments.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
17.33B17.60B16.34B17.22B14.90B13.58B
Gross Profit
6.52B7.22B6.71B6.12B5.72B5.04B
EBIT
4.82B2.93B2.63B1.48B1.48B1.22B
EBITDA
8.22B6.37B5.85B4.46B4.00B3.50B
Net Income Common Stockholders
2.94B1.55B1.41B824.00M925.00M871.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
0.00193.00M345.00M914.00M390.00M87.00M
Total Assets
88.42B85.58B81.76B78.04B74.75B69.37B
Total Debt
39.56B37.76B35.31B33.10B29.53B24.15B
Net Debt
38.24B37.57B34.97B32.18B29.14B24.06B
Total Liabilities
69.62B67.84B63.81B60.52B56.96B53.42B
Stockholders Equity
16.62B15.56B15.50B15.62B15.89B14.05B
Cash FlowFree Cash Flow
-641.00M-693.00M-2.05B-2.56B-5.49B-4.22B
Operating Cash Flow
5.20B5.01B3.40B3.22B11.00M1.26B
Investing Cash Flow
-5.63B-5.54B-5.23B-5.57B-5.15B-4.97B
Financing Cash Flow
1.06B674.00M1.45B2.88B5.45B3.73B

Edison International Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price56.94
Price Trends
50DMA
56.63
Positive
100DMA
57.39
Negative
200DMA
69.57
Negative
Market Momentum
MACD
0.36
Negative
RSI
51.09
Neutral
STOCH
76.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EIX, the sentiment is Neutral. The current price of 56.94 is above the 20-day moving average (MA) of 56.63, above the 50-day MA of 56.63, and below the 200-day MA of 69.57, indicating a neutral trend. The MACD of 0.36 indicates Negative momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 76.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EIX.

Edison International Risk Analysis

Edison International disclosed 47 risk factors in its most recent earnings report. Edison International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Disclosure Controls and Procedures Q4, 2024
2.
Note 14. Equity Q4, 2024
3.
Note 12. Commitments and Contingencies Q4, 2024

Edison International Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
PPPPL
74
Outperform
$25.79B26.057.00%3.00%5.62%30.02%
EIEIX
71
Outperform
$22.44B8.2717.93%5.51%5.36%209.92%
CMCMS
71
Outperform
$21.53B21.3012.53%2.90%5.87%3.59%
ESES
71
Outperform
$24.08B28.305.63%4.53%10.82%
FEFE
70
Neutral
$24.66B22.738.69%3.98%7.92%1.54%
CNCNP
67
Neutral
$24.45B25.189.22%2.21%4.76%4.08%
63
Neutral
$8.63B10.244.67%4.35%3.78%-12.74%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EIX
Edison International
56.22
-14.71
-20.74%
CNP
Centerpoint Energy
37.22
8.65
30.28%
CMS
CMS Energy
69.36
10.33
17.50%
FE
FirstEnergy
42.27
4.72
12.57%
ES
Eversource Energy
63.06
8.19
14.93%
PPL
PPL
34.62
6.77
24.31%

Edison International Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: -3.05%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and challenging aspects. While Edison International reported strong financial performance, regulatory progress, and successful financing activities, it also faced challenges related to potential losses from the Eaton Fire and ongoing uncertainties in wildfire legislation. The overall sentiment reflects cautious optimism, given the company's ability to navigate regulatory and operational challenges while maintaining financial guidance.
Q1-2025 Updates
Positive Updates
Core Earnings Per Share Increase
Edison International reported core earnings per share of $1.37 for Q1 2025, compared to $1.13 in the same period last year, marking a notable improvement despite the lack of a decision in the 2025 General Rate Case.
Rebuilding and Wildfire Mitigation Efforts
SCE plans to underground more than 150 circuit miles in High Fire Risk Areas, improving infrastructure resilience and reliability following recent wildfires.
Strong Regulatory Progress
SCE achieved important milestones, including the unanimous CPUC approval of the TKM settlement agreement and progress in the WMCE proceeding.
Affirmation of EPS Guidance
Edison International affirmed its 2025 EPS guidance range of $5.94 to $6.34 and its long-term EPS growth expectations of 5 to 7% from 2025 to 2028.
Successful Financing Activities
EIX and SCE successfully issued $550 million of senior notes and $1.5 billion of long-term debt, respectively, with strong investor support.
Negative Updates
Potential Material Losses from Eaton Fire
Edison International disclosed that it is probable they will incur material losses related to the Eaton Fire, with investigations ongoing and no conclusive evidence pointing to another source of ignition.
Uncertainty in Wildfire Legislation
Discussions on potential updates to California's wildfire legislative framework are in early stages, with no specific proposals advanced yet.
Interest Expense Impact
Higher interest expense at EIX Parent affected quarterly earnings, partially offsetting the positive impact of the TKM settlement approval.
Company Guidance
During Edison International's First Quarter 2025 Financial Teleconference, the company reported core earnings per share of $1.37, an increase from $1.13 the previous year. However, this comparison was noted to be not particularly meaningful due to the pending decision in Southern California Edison's (SCE) 2025 General Rate Case. The company remains confident in meeting its 2025 EPS guidance and anticipates a 5 to 7% core EPS compound annual growth rate through 2028. SCE plans to submit its 2026 Wildfire Mitigation Plan, which will include investments such as undergrounding over 150 circuit miles and hardening an additional 1,800 miles of overhead distribution infrastructure. Additionally, the company highlighted a recent settlement agreement in its Wildfire Mitigation and Cost Recovery proceeding, which is expected to contribute $0.10 per share of true-up earnings embedded in the 2025 guidance. Edison International reaffirmed its 2025 EPS guidance range of $5.94 to $6.34 and long-term EPS growth expectations up to $7.14 by 2028.

Edison International Corporate Events

Business Operations and Strategy
Edison International Highlights Grid Modernization Efforts
Positive
Apr 30, 2025

On April 29, 2025, Edison International provided a business update highlighting its ongoing efforts to transform the electric power industry through significant investments in grid modernization and clean energy initiatives. The company is focused on addressing wildfire risks, enhancing grid reliability, and supporting California’s climate goals. The update emphasized the importance of regulatory mechanisms that provide revenue certainty and promote energy efficiency, as well as the company’s commitment to maintaining a strong rate base and dividend growth.

Business Operations and StrategyFinancial Disclosures
Edison International Reports Strong Q1 Turnaround
Positive
Apr 29, 2025

On April 29, 2025, Edison International reported a significant turnaround in its first-quarter financial results, with a net income of $1,436 million compared to a net loss in the same period last year. The company highlighted strong regulatory progress and ongoing efforts to enhance the safety and reliability of its electrical infrastructure, particularly in wildfire-impacted areas. Edison International reaffirmed its core earnings guidance for 2025 and expressed confidence in achieving 5-7% core EPS growth from 2025 to 2028, underscoring its commitment to supporting California’s economic development and community safety.

Business Operations and Strategy
Edison International Focuses on Grid Modernization
Neutral
Feb 28, 2025

In a February 2025 business update, Edison International outlined its strategic focus on grid modernization and clean energy transition, emphasizing the importance of investment in infrastructure to meet California’s aggressive climate goals. The company highlighted its efforts in wildfire mitigation and the impact of regulatory mechanisms that provide revenue certainty, despite potential risks and challenges such as cybersecurity, regulatory changes, and extreme weather events.

Business Operations and StrategyFinancial Disclosures
Edison International Revises 2025 EPS Guidance Amid Challenges
Neutral
Feb 27, 2025

Edison International reported its fourth-quarter and full-year 2024 financial results, with a fourth-quarter net income of $340 million and full-year net income of $1,284 million. The company has revised its 2025 Core EPS guidance to $5.94-$6.34, reflecting the impact of the TKM settlement, which authorizes $1.6 billion of cost recovery for pre-AB 1054 wildfire. Despite challenges such as higher operation and maintenance expenses, Edison International remains committed to grid resiliency and wildfire mitigation efforts. The company continues to engage with stakeholders to enhance the regulatory framework and ensure safety and reliability in its operations.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.