UBS revised its recommendation on Edison International (NYSE:EIX), downgrading the stock from Buy to Neutral while simultaneously lifting its price target to $78.00 from $70.00. The new target suggests potential upside relative to Edison’s most recent share price of $69.08, although InvestingPro data indicates the stock is trading above its Fair Value.
The UBS action follows a period of robust share-price performance for Edison International. Over the last six months, Edison shares rose 21%, outpacing the Dow Jones Utility Index, which gained 1% over that same span. InvestingPro’s figures show an even stronger picture, with a six-month total return of 26.46% and a one-year total return of 42.51%. At present the stock is trading 0.99% below its 52-week high of $69.63.
UBS highlighted two constraints on near-term upside. First, the market may still be pricing in a discount tied to a potential resolution of fire-related liabilities connected to Eaton. Second, the firm noted that the next major catalyst - Phase 2 wildfire legislation - is unlikely to materialize for roughly six months, which limits immediate upside drivers.
The broker also flagged policy and regulatory uncertainty tied to the upcoming California gubernatorial election. UBS said election-related dynamics could create affordability concerns for ratepayers even though Edison’s reported cost of service, at 29.3 cents per kilowatt-hour, is lower than that of other investor-owned utilities in the state.
On UBS’s assessment of the stock’s short-term profile, the firm described the risk-reward as becoming more balanced, quoting a ratio of 1.5:1 and noting that its internal estimates are currently in line with consensus.
Separately, the company announced a 6% increase in its quarterly dividend to $0.8775 per share, effective for shareholders of record as of January 7, 2026. That raises the annual dividend to $3.51 per share from the prior $3.31.
Edison International is also pursuing a securitization transaction valued at $1.951 billion intended to cover costs related to Woolsey fire claims and other items. The proceeds are planned to reduce debt at Southern California Edison and to support further investments at the subsidiary.
In another note included in recent coverage, UBS reiterated a Buy rating for Edison and raised a separate price target to $70 from $66, citing perceived undervaluation, a cited dividend yield of 5.5%, and improving financial metrics such as funds from operations to debt. Those comments were presented alongside the broader discussion of valuation and near-term catalysts.
Investors seeking additional proprietary context were directed to InvestingPro, where more than 10 exclusive ProTips and a Pro Research Report covering Edison and more than 1,400 U.S. equities are available, according to the data referenced.
Summary
UBS moved Edison International from Buy to Neutral while raising its price target to $78. The firm pointed to recent strong share performance, the timing of wildfire legislation, and California election-related policy risk as key reasons for a more balanced near-term outlook. Edison increased its dividend and is pursuing securitization to address wildfire-related costs.
Key points
- UBS downgraded Edison International to Neutral but increased the price target to $78 from $70.
- Edison’s shares have outperformed over six months and one year, with InvestingPro reporting a 26.46% six-month total return and a 42.51% one-year return.
- The company announced a 6% quarterly dividend increase and is seeking $1.951 billion in securitization to address Woolsey fire-related costs and related items.
Risks and uncertainties
- Timing of Phase 2 wildfire legislation is expected to be about six months away, reducing near-term regulatory catalysts - a risk for investors seeking immediate upside.
- Policy and regulatory uncertainty associated with the California gubernatorial election could affect affordability and regulatory outcomes despite Edison’s lower reported cost of service.
- Ongoing wildfire liability-related proceedings and the need for securitization introduce execution risk for the company’s balance sheet plans and timing of related benefits.