Barclays Downgrades Edison International (EIX) to Equalweight

Barclays analyst Nicholas Campanella downgraded Edison International (NYSE: EIX) from Overweight to Equalweight with a price target of $75.00 (from $78.00).

The analyst comments: “We downgrade shares to Equal Weight from Overweight following strong YTD outperformance relative to peers. While EIX delivered a solid quarterly beat, we think the underlying financial plan is subject to change as commentary alluded to a potential Plan B, and this is incrementally negative to the California utility trade. We recognize a range of outcomes remain under evaluation as policymakers work toward an August legislative resolution. Against that backdrop, EIX added new disclosure language around dividend risk and cost-of-capital considerations, which we view as reflecting the broader set of scenarios currently being contemplated (primarily lower state ROEs). We also note a shift in management tone, with greater emphasis on how future investment plans could be impacted if access to low-cost capital is impaired or if the ultimate framework proves less constructive than expected. In our view, this raises the possibility that EIX's capital and growth outlook could evolve following the legislative outcome. With EIX the best-performing California utility stock YTD, and uncertainty increasing around both estimate revisions and what constitutes an acceptable Phase 2 outcome, we believe an Equal Weight rating is now appropriate.”

For an analyst ratings summary and ratings history on Edison International click here. For more ratings news on Edison International click here.

Shares of Edison International closed at $78.73 yesterday.

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