Evercore ISI Reiterates In Line Rating on Hawaiian Electric (HE), 'Takeaways from AG's Phase Two Report'

Evercore ISI analyst Durgesh Chopra reiterated an In Line rating and $16.00 price target on Hawaiian Electric (NYSE: HE)

The analyst comments "Hawaii Attorney General’s Phase Two report essentially delineates the cause and origin of the devastating PM fire but does not make it “official.” The report attributes the subsequent destruction from the fire to poor preparation and response from many constituents. While deferring to the pending ATF report for the official cause and origin of the fire, Hawaii AG Anne Lopez’s report effectively states the cause on page 69, saying: “The wind on August 8, 2023 proved too much for Lahaina’s aging above-ground electrical transmission infrastructure. A small vegetation fire sparked by a downed line would ultimately become an urban conflagration.” On pages 143-144, the report discusses the difficult “mopup” conditions firefighters faced to fully extinguish the AM fire and issued a finding on page 151, implying that the PM fire was a result of insufficient mopup of the AM fire, stating: “MFD firefighters performed mopup as proven successful under typical conditions. However, under the severe weather conditions on August 8, 2023, this level of mopup appears to have been insufficient.” Overall, the report highlights poor preparation and response from many constituents involved that led to the devastating destruction, including from: Hawaiian Electric, the Maui Fire Department, Maui Police Department, County of Maui, State of Hawaii, Department of Land and Natural Resources, Maui Emergency Management Agency, among others. While the report states there is no single factor (page 27) to blame for the fire, it states on page 300 that: “if the Lahaina fires had not started in the first place, then the subsequent destruction of Lahaina on August 8-9, 2023, would not have happened.” To summarize, this report’s findings are very much consistent with investor expectations for how the events unfolded and we do not anticipate the ATF’s report to have major surprises either. The Maui Fire Department (working in collaboration with the ATF) has a meeting scheduled on Tuesday with representatives from the ATF, but at this time, there is no timeline on when the final report will be issued."

For an analyst ratings summary and ratings history on Hawaiian Electric click here. For more ratings news on Hawaiian Electric click here.

Shares of Hawaiian Electric closed at $11.62 yesterday.

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