PG&E’s bankruptcy filing aiming to lift its massive liability burden may offer a boost to Edison International (NYSE:EIX), helping the latter reverse its two-year stock slide, Bloomberg analyst Kit Konolige writes at Bloomberg First Word.
Were it not for PG&E, EIX would be the worst performing utility because of investor fears about California’s inverse condemnation rule, which threatens utilities with tens of billions of dollars in liabilities.
But Konolige thinks PG&E’s bankruptcy may force politicians in California to change liability rules and allow for full utility recovery of costs, which should boost EIX shares by paring back liability overhang, even though the company has little exposure at present.
Earlier: Edison cut to Sell at BAML on California's 'challenging operating environment' (Jan. 15)
Now read: PEY: Good Choice For A Dovish Fed »
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