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Edison (EIX) Gains From Capital Investments, Solvency Position a Woe
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Edison International (EIX - Free Report) is benefiting from systematic capital investment to strengthen its infrastructure, which will boost customer reliability. However, weak solvency position remains a threat.
This Zacks Rank #3 (Hold) stock delivered an earnings surprise of 1.69%, on average, in the last four quarters. The Zacks Consensus Estimate for 2021 earnings per share is pegged at $4.52, up 0.9% over the past 60 days.
Tailwinds
The company generates revenues from favorable rate-base outcomes from regulatory authorities. In January 2021, the California Public Service Commission approved recovery of certain incremental wildfire mitigation expenses through track 2 of Edison’s general rate case with the revenue requirement of $391 million. It has also received approval of the regulatory authority for spending $800 million to support electric vehicles.
Edison is actively exploring opportunities to expand utility operations through systematic capital investment. The company plans to invest $12.6 billion over the long term to expand its distribution and transmission facilities.
The company’s Charge Ready 2 program will act as a catalyst toward achieving its carbon neutral target by 2045, through electrification of vehicles. It is also committed to a long-term goal to electrify its own vehicle fleet, including 100% of all light-duty vehicles by 2030.
Headwinds
Edison’s wildfire expenses continue to adversely impact its operational results. Moreover, unprecedented weather conditions in California and susceptibility of additional wildfire activity remain threats.
Moreover, the company has a weak solvency position, with both its long-term as well as current debt lying significantly higher than its cash reserve, as of Mar 31, 2021.
Price Performance
In the past 12 months, shares of this utility have gained 4.1%, underperforming the industry’s 10.1% growth.
The Zacks Consensus Estimate for 2021 earnings per share for MGE Energy, Entergy Corporation and Hawaiian Electric has moved up 0.3%, 0.2%, and 8.8%, respectively, in the past 60 days.
The current dividend yield of MGE Energy, Entergy Corporation and Hawaiian Electric is 2%, 3.8% and 3.2% respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Edison (EIX) Gains From Capital Investments, Solvency Position a Woe
Edison International (EIX - Free Report) is benefiting from systematic capital investment to strengthen its infrastructure, which will boost customer reliability. However, weak solvency position remains a threat.
This Zacks Rank #3 (Hold) stock delivered an earnings surprise of 1.69%, on average, in the last four quarters. The Zacks Consensus Estimate for 2021 earnings per share is pegged at $4.52, up 0.9% over the past 60 days.
Tailwinds
The company generates revenues from favorable rate-base outcomes from regulatory authorities. In January 2021, the California Public Service Commission approved recovery of certain incremental wildfire mitigation expenses through track 2 of Edison’s general rate case with the revenue requirement of $391 million. It has also received approval of the regulatory authority for spending $800 million to support electric vehicles.
Edison is actively exploring opportunities to expand utility operations through systematic capital investment. The company plans to invest $12.6 billion over the long term to expand its distribution and transmission facilities.
The company’s Charge Ready 2 program will act as a catalyst toward achieving its carbon neutral target by 2045, through electrification of vehicles. It is also committed to a long-term goal to electrify its own vehicle fleet, including 100% of all light-duty vehicles by 2030.
Headwinds
Edison’s wildfire expenses continue to adversely impact its operational results. Moreover, unprecedented weather conditions in California and susceptibility of additional wildfire activity remain threats.
Moreover, the company has a weak solvency position, with both its long-term as well as current debt lying significantly higher than its cash reserve, as of Mar 31, 2021.
Price Performance
In the past 12 months, shares of this utility have gained 4.1%, underperforming the industry’s 10.1% growth.
Stocks to Consider
Some better-ranked stocks in the same industry are MGE Energy Inc. (MGEE - Free Report) , Entergy Corporation (ETR - Free Report) and Hawaiian Electric Industries, Inc. (HE - Free Report) , each currently having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2021 earnings per share for MGE Energy, Entergy Corporation and Hawaiian Electric has moved up 0.3%, 0.2%, and 8.8%, respectively, in the past 60 days.
The current dividend yield of MGE Energy, Entergy Corporation and Hawaiian Electric is 2%, 3.8% and 3.2% respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>