EI

Edison International

EIX
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Edison International AI Insights

Informational only. Not investment advice.
As of 2025-12-16

Snapshot

  • EPS growth 5Y of 63.4% vs industry median 5.9% - 10x outperformance despite regulated utility model, driven by rate base expansion.[EPS Growth 5Y]
  • FCF negative (-722M TTM) with 6.1B capex - infrastructure investment cycle consuming all operating cash (5.4B) plus external funding.[Free Cash Flow]
  • Debt/equity 2.54x with 39.4B total debt vs 17.2B equity - interest expense (1.76B) consumes 32% of operating income.[Debt to Equity]

Watch Triggers

  • Interest Expense: Exceeds 35% of operating incomeCurrently 32% - further deterioration signals debt burden becoming unsustainable for dividend.
  • Free Cash Flow TTM: Remains negative beyond 2026Prolonged negative FCF forces equity dilution or dividend cuts to fund capex.
  • ROE TTM: Falls below 15%Would indicate regulatory disallowances or cost overruns eroding earned returns.

Bull Case

Regulated utility with 28.9% operating margin (vs 19.1% median) and 21.6% ROE earns premium returns on 63B rate base with visible capex recovery.

Operating Margin TTMROE TTMPPE

P/E of 7.8x vs industry 21x despite 63% 5Y EPS growth - valuation disconnect if wildfire liability concerns prove manageable.

P/E RatioEPS Growth 5Y

Bear Case

39.4B debt (2.54x D/E) with negative FCF (-722M) requires continuous capital market access; rising rates compress equity returns.

Total DebtDebt to EquityFree Cash Flow TTM

California wildfire exposure creates tail risk - 364M cash vs 9.4B current liabilities leaves no buffer for adverse legal outcomes.

Cash and EquivalentsCurrent LiabilitiesWorking Capital

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
45%

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Forward Thesis

Rate base growth from wildfire hardening and grid modernization will sustain 8-10% EPS growth through 2028.

1-3ymed
  • 6.1B annual capex flowing into regulated rate base
  • California electrification mandates driving demand
  • Operating margin 28.9% vs industry 19.1% median
EPS 3Y CAGR 61.2% demonstrates executionPPE of 63B (70% of assets) in rate baseROE 21.6% vs industry median 9.1%
Valuation Context
Caveats

Public Strategies Rankings

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Fundamental company data provided by Morningstar, updated daily.

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