HE - Hawaiian Electric collapses to 13-year low as analysts lawyers link to Maui wildfires

2023-08-14 12:32:36 ET

Hawaiian Electric ( NYSE: HE ) could be headed for its largest-ever one-day percentage loss, -35.3% to its lowest level since 2010, on concerns that its power lines may be linked to the Maui wildfires that have killed at least 96 people.

California's largest utility, PG&E Corp., was driven into bankruptcy in 2019 after its equipment was deemed responsible for deadly wildfires, which has prompted companies in some states to pre-emptively shut off power when high, dry winds potentially could spark catastrophic fires.

Attorneys reportedly are collecting evidence and interviewing eyewitnesses that indicate damaged power infrastructure owned by Hawaiian Electric ( HE ) created the spark for the fires.

The utility's insurance will provide some protection but the company has not disclosed the deductibles or limits, and its coverage likely totals less than $1B based on much larger utilities' limits, while recent wildfire related claims in California, Colorado and Oregon all have exceeded $1B, Wells Fargo analyst Jonathan Reeder said in cutting his stock price target to $25 from $35 and reiterating his Underweight rating.

"It is our understanding that [Hawaiian Electric's] liability standard revolves around a reasonableness of care when determining negligence, a lower burden for plaintiffs to prove than say a gross negligence standard," Reeder wrote.

More on Hawaiian Electric:

• Financial and valuation comparison to sector peers
• Analysis: Hawaii Electric: Surprisingly Good Stability, But Population Decline Is A Drag
• Stock price return: Down 53% YTD, down 23.5% in the past 12 months

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