UPDATE: ISI Group Downgrades Edison International to Neutral on Valuation, Risk/Reward
In a report published Wednesday, ISI Group analyst Greg Gordon downgraded the rating on Edison International (NYSE: EIX) from Buy to Neutral, but raised the price target from $50.50 to $54.00.
In the report, Gordon noted, “Our base valuation case--a twelve month target price of $54/share up from $50.50/share--assumes that SONGS Unit 2 restarts and that SONGS Unit 3 shuts down, with SCE being found to be prudent in its handling of their equipment purchases and the outage that began in early 2012. The target increase is driven by an increase in our 2015 target PE multiple for SCE to 15x from 14x. With a total return to our target price of 3% and downside of >10% under a worst case outcome at SONGS, we think the risk/reward for EIX is less palatable (even though we believe the downside case unlikely).”
Edison International closed on Tuesday at $53.80.
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