Edison International: The Market May Be Overestimating The Risk From The LA Fires

2025-01-13 08:30:00 ET

Summary

• Edison International, a major electric utility in Southern California, is one of the major suppliers of electricity to the disaster-ravaged Los Angeles area.
• The market has sold off the company's stock in the recent days, sending it down to levels last seen in October of 2023.
• However, the largest of the fires are not in Edison International's service territory, reducing the risk that the company will actually suffer long term damage from this event.
• The company's fire mitigation program further reduces the risk, as there have been no accusations that the company bears any legal liability for the fires.
• The company's balance sheet is weaker than its peers, but EIX stock's valuation is attractive right now and it might be worth it for someone willing to speculate.

Edison International Overview

Edison International ( EIX ) is a regulated electric utility that primarily serves Southern California:

Edison International’s website provides the following description of its primary business unit, Southern California Edison:

Edison International’s subsidiary, Southern California Edison, is one of the largest electric utilities in the United States and a longtime leader in renewable energy and energy efficiency.

With headquarters in Rosemead, Calif., SCE serves approximately 15 million people in a 50,000 square-mile area of Central, Coastal and Southern California. SCE has provided electric service in the region for 136 years.

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