The devastating fires in Southern California are rattling the stock price of Edison International, the parent company of Southern California Edison, amid mounting accusations and lawsuits over the company’s potential role in the blazes.
After plunging 23% this month, Edison International’s stock rose 5% to close at $61.30 on Wednesday, making it one of the worst-performing companies in the Standard & Poor’s 500. The rebound came after Ladenburg Thalmann analysts upgraded their rating on the stock from sell to neutral. , said its price target of $56.50 per share reflects the worst-case outcome related to the current wildfires.
“At this point, it is too early to tell what the outcome will be in terms of the impact of the fires on the solvency of the California Wildfire Insurance Fund or on Edison International’s future earnings,” the analysts said, according to Barron’s. There is. “An initial assessment of the role of SCEs in fire outbreaks is likely not to occur until the summer of 2025 at the earliest.”
After wildfires a few years ago caused Wall Street investors to lose confidence and rating agencies to threaten to downgrade California’s investor-owned utilities, state lawmakers closed down the wildfire fund. Established.
Market analyst Zacks downgraded shares of Edison International from Outperform to Neutral following the fire outbreak last week. While Zacks expects Edison’s operating revenue to increase from 2025 to 2026, he also notes that “the company is incurring significant wildfire-related costs” and “bigger-than-expected decommissioning costs “This could have a significant impact on grades.”
Another analyst, RBC Capital Markets, as recently as October called Edison a “high-quality operator whose best-in-class mitigation efforts improve investor confidence in wildfire risks,” He had a lofty view of it.
The aftermath of the fire was a sudden disruption for the company, which had seen rapid growth in recent months. In its most recent quarterly report, the company reported a profit of $516 million, or $1.33 per share, compared with profit of $155 million, or 40 cents per share, in the third quarter of last year.
“Over the past few years, our team has achieved remarkable success in responding to unprecedented climate change, increasing the resilience of our business operations and positioning us for future growth,” President Pedro J. Pizarro said in the report. “We have prepared a strong posture.”
Fire officials are investigating whether downed Southern California Edison utility equipment played a role in igniting the 800-acre Hearst Fire near Sylmar, company officials confirmed.
The company released a report Friday saying a collapsed conductor was found on a pylon near the Hearst fire, but that “it is not known whether the damage observed occurred before or after the fire.” . The California Department of Forestry and Fire Protection said the fire was almost completely contained.
SCE is also under scrutiny for its possible role in starting the Eaton Fire, which burned 14,000 acres, destroyed thousands of structures and ravaged all of Altadena, killing at least 16 people.
On Tuesday, the Newport Beach law firm of Bridgford Gleason & Artinian filed a class action lawsuit in Los Angeles Superior Court against SCE over the Eaton Fire on behalf of victims, including Jeremy Garcey, whose Altadena property was destroyed in the fire. filed a lawsuit.
“Based on our investigation, discussions with various consultants, SCE’s public statements, and video evidence showing the cause of the fire, the Eaton Fire ignited because SCE failed to shut off power to overhead power lines that cross Eaton Canyon. “This is despite the National Weather Service issuing a red flag PDS wind warning the day before the fire occurred,” attorney Richard Bridgford said in a statement.
The firm said it has represented more than 10,000 California fire victims in previous lawsuits against Pacific Gas & Electric Co. and SCE. Bridgeford told Yahoo Finance that his mailbox is full of Southern Californians asking to join the Eaton fire lawsuit, and that he expects “hundreds of people will participate.”
On Wednesday morning, parts of Los Angeles and Ventura counties were returned to the most extreme level of fire warning, “particularly hazardous conditions,” raising concerns about the possibility of new fires.
“The danger is not over yet,” Los Angeles Fire Department Chief Christine Crowley said at a news conference Wednesday. “So please prioritize your safety.”
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