Edison International raised to Buy at Mizuho as earnings power underestimated
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Edison International (NYSE:EIX) +1% in Tuesday's trading as Mizuho upgraded the stock to Buy from Neutral with a $75 price target, up from $73, saying investors are underestimating the utility's earnings power and positive catalysts over the next 12 months as the company focuses on higher interest rates associated with debt issued to fund wildfire liabilities.
Mizuho's Anthony Crowdell said he sees low risk to Edison's (EIX) 5%-7% EPS growth rate target, as the push to electrification in Southern California should continue to support rate-base growth of 8% or more.
Edison (EIX) management has extended the target through 2028, independent of the company's ability to recover costs associated with 2017-18 wildfires, the analyst said.
Pinnacle West Capital (NYSE:PNW) +1.3% as Crowdell also upgraded the stock to Buy from Neutral with an $85 PT, raised from $78, citing "improved regulation and load growth that is at or near the best in the industry," creating a combination that should provide upside to earnings and P/E premium.