Last Update 25 Jan 26

Fair value Decreased 0.68%

EIX: Future Capital Plan And Dividend Policy Will Drive Returns

Analysts have nudged their price targets on Edison International slightly lower by about $1 per share. This reflects a blend of updated assumptions on fair value, discount rate, revenue growth, profit margin and future P/E, following mixed recent research that includes both a downgrade and a separate target increase.

Analyst Commentary

Recent research on Edison International has sent mixed signals, but it still gives you a useful snapshot of how the Street is thinking about risk, regulation and valuation for California utilities.

On the cautious side, one firm moved to a more bearish stance on the stock and highlighted limited room for improvement from the state regulator. A separate research note pointed to a proposed 35 basis point cut to allowed return on equity for several California utilities, including Edison International, citing customer affordability as a key driver. That report flagged broadly negative headlines for the group and suggested some companies may lean more conservative in their planning assumptions, with attention shifting to the 2026 legislative process as a possible venue for changes to the current utility framework.

Against that backdrop, target price changes for Edison International have been relatively modest. One firm reduced its target by about $1 per share, while another raised its target by $4 per share. Put together, this reflects analysts recalibrating their models as they weigh regulatory developments, earnings assumptions and what they see as a reasonable P/E multiple for the stock.

Earlier coverage also started Edison International at an Equal Weight rating with a US$56 price target as part of a broader launch on the power and utilities group. That initiation framed utilities as materially undervalued and argued that the sector was facing what the firm described as a perfect storm of structural tailwinds, rather than purely cyclical forces.

Bullish Takeaways

Bullish analysts lifting the Edison International price target by US$4 signal that they see room for upside in their fair value work, even with regulatory noise in the background.
The Equal Weight initiation at US$56 came alongside a view that utilities are materially undervalued, which supports the idea that current pricing may not fully reflect long term fundamentals for Edison International.
Despite a separate US$1 trim to the target, the presence of both higher and lower targets suggests that some bullish analysts still see execution and earnings power as attractive enough to warrant constructive valuation assumptions.
Comments about structural rather than cyclical drivers for the broader utilities group point to potential support for long duration growth and cash flow profiles, which bullish analysts may be baking into Edison International models.

What’s in the News

Edison International declared a quarterly common stock dividend of US$0.8775 per share, payable on January 31, 2026, to shareholders of record on January 7, 2026. This brings the stated annual dividend rate to US$3.51 per share, a 6% increase from US$3.31 per share (Key Developments).
The company commenced cash tender offers to purchase any and all of its outstanding 5.00% Fixed-Rate Reset Cumulative Perpetual Preferred Stock, Series B, and 5.375% Fixed-Rate Reset Cumulative Perpetual Preferred Stock, Series A, at US$995 and US$1,000 per US$1,000 liquidation preference respectively, plus accrued dividends. The offers are scheduled to expire on December 19, 2025 (Key Developments).
Following the expiration of these offers on December 19, 2025, Edison International accepted for purchase US$415,517,000 aggregate liquidation preference of Series B Preferred Stock and US$744,975,000 of Series A Preferred Stock. Settlement is expected on December 23, 2025, at the previously outlined prices plus accrued dividends (Key Developments).
Between July 1, 2025 and September 30, 2025, Edison International repurchased 49,779 shares for US$2.71m, and has completed a total of 549,779 shares for US$32.19m under the buyback program announced on February 27, 2025 (Key Developments).

Valuation Changes

Fair Value: moved slightly lower from 83.46 to 82.90, a small trim in the underlying valuation output.
Discount Rate: edged down from 8.21% to about 8.18%, a very modest change in the required return assumption.
Revenue Growth: nudged up from roughly 5.41% to 5.51%, reflecting a small adjustment to top line expectations in the model.
Net Profit Margin: increased from about 11.66% to 12.64%, implying a slightly higher assumed level of profitability on future earnings.
Future P/E: reduced from around 16.44x to 15.01x, meaning the updated framework applies a somewhat lower valuation multiple to projected earnings.

Edison's strategic regulatory engagement and adoption of advanced technologies could drive higher earnings growth and improved margins beyond current market expectations.
Surging electrification, population growth, and proven cost leadership position SCE for accelerated revenue expansion and regulatory support relative to peers.
Wildfire risks, regulatory uncertainty, climate impacts, distributed energy adoption, and cost pressures threaten Edison International's earnings stability, revenue growth, and financial resilience.

Catalysts

About Edison International

Through its subsidiaries, engages in the generation and distribution of electric power.What are the underlying business or industry changes driving this perspective?

Analyst consensus is overlooking the likelihood that-as Edison more aggressively pursues revisions to the General Rate Case proposal and leverages its strong relationship with California policymakers-the final decision could surpass base expectations, unlocking even greater authorized revenue and accelerated capital recovery, which would drive substantially higher long-term earnings growth.
While analysts broadly view SCE's grid hardening and wildfire mitigation as margin stabilizers, the accelerated adoption of advanced AI
and sensor-driven technologies like AWARE is likely to sharply reduce risk-related costs beyond current projections, potentially driving an outsized improvement in net margins over time.
Edison International stands to benefit more than peers from California's surging electrification of transportation, industrial processes, and data center expansion; this structural demand growth will increase throughput and non-fuel revenues at a much faster pace than factored into most estimates.
SCE's track record of operating with the lowest system average rates among major California utilities, coupled with ongoing digitalization and cost management, positions it to win regulatory support for expanded rate base initiatives that will compound earnings growth well into the next decade.
Ongoing urbanization and population migration trends in Southern California mean SCE's asset base and customer pool will continue to grow even in the face of economic volatility, providing an underappreciated cushion for stable cash flows and long-term revenue expansion.

Edison International Earnings and Revenue Growth

Edison International Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more optimistic perspective on Edison International compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
The bullish analysts are assuming Edison International's revenue will grow by 8.8% annually over the next 3 years.
The bullish analysts assume that profit margins will shrink from 15.0% today to 11.3% in 3 years time.
The bullish analysts expect earnings to remain at the same level they are now, that being $2.6 billion (with an earnings per share of $6.35). The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 15.4x on those 2028 earnings, up from 8.0x today. This future PE is lower than the current PE for the US Electric Utilities industry at 19.9x.
Analysts expect the number of shares outstanding to decline by 0.6% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.77%, as per the Simply Wall St company report.

Edison International Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing wildfire risk in Southern California continues to expose Edison International to sizable legal liabilities, highlighted by the Eaton Fire and historical precedent for multi-billion-dollar settlements, increasing uncertainty around net margins and future earnings.
Legislative and regulatory changes in California, such as potential expansion or changes to AB 1054, may require upfront shareholder or utility equity contributions or alter risk-sharing models, which could raise cost of capital and negatively affect future earnings and net income.
Intensifying climate change is driving higher frequency and severity of wildfires, floods, and heatwaves, directly increasing Edison International's operational, insurance, and infrastructure costs, leading to persistent pressure on net margins.
The accelerating adoption of distributed energy resources-such as rooftop solar, battery storage, and microgrids-threatens to erode Edison International's traditional electricity sales and long-term revenue, as increasing numbers of customers generate or store their own power.
Persistent rate pressure due to the need for significant capital expenditures for wildfire mitigation and grid modernization, combined with customer affordability challenges and political pushback, could constrain Edison International's pricing power and impede long-term revenue growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bullish price target for Edison International is $83.24, which represents two standard deviations above the consensus price target of $66.44. This valuation is based on what can be assumed as the expectations of Edison International's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $86.0, and the most bearish reporting a price target of just $52.5.
In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $22.6 billion, earnings will come to $2.6 billion, and it would be trading on a PE ratio of 15.4x, assuming you use a discount rate of 7.8%.
Given the current share price of $54.77, the bullish analyst price target of $83.24 is 34.2% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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