Edison International's Revenues Growing Faster Than Peers
Unlike several US electric utilities, Edison International (NYSE: EIX) has been able to grow its annual operating revenues faster than the peer average, Argus’ Gary Hovis said in a report. He maintained a Buy rating for the company, while raising the price target from $83 to $86.
Analyst Gary Hovis noted that Edison International had “strong earnings visibility, expanding infrastructure improvement program, and solid cost controls.” Moreover, the company is benefiting from growing kilowatt-hour sales, while its balance sheet had improved and it was operating in a favorable regulatory environment.
Hovis mentioned that Edison International would be able to meet all anticipated cash requirements through 2018 in view of its current cash balance, cash from operations, and credit facility. Moreover, the company would be able to grow revenues from the recovery of its investments in infrastructure improvement projects and alternative energy facilities.
“Edison International’s strengths also include the retirement of the San Onofre nuclear plant, and the exit from the nonregulated, loss-ridden Edison Mission Energy business,” the analyst wrote. He added that in view of all these positives, the company should be able to generate total returns to shareholders of 5-6 percent annually over the next four to five years.
Edison International’s shares are currently trading at a small premium to the average multiple for comparable electric utilities with fully regulated operations. “Our revised 12-month target price of $86, along with the dividend yield, implies a potential total return of about 14% over the next 12 months,” Hovis stated.
Latest Ratings for EIX
|Jan 2017||Evercore ISI Group||Upgrades||Hold||Buy|
|Oct 2016||Argus Research||Maintains||Buy|
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