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

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.
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Sean Anthony Eddy

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.