EIX Options: Mixed Signals for Edison International

No relevant news was found for this stock today.

EIX's technical outlook leans slightly bearish. The recent price action shows a recovery from a low of $50.15 on July 21st, with the price currently at $55.695. This is above the 50-day SMA (55.3941) and the 21-day EMA (55.848861), indicating some short-term upward momentum. However, the price remains below the 200-day SMA (54.509949999999996), suggesting longer-term resistance. Momentum indicators are mixed. The MACD is showing a negative histogram (-0.26647889724188084), and the RSI is at 42.526607201408275, both indicating bearish sentiment. The stochastic oscillator shows the %K line at 34.504187440872975, implying a potential oversold condition, which could lead to a short-term bounce. The ADX is at 17.44851311782733, which indicates a weak trend. Overall, the price action and momentum indicators suggest a potential for further consolidation or a slight downward move in the short term, given the resistance from the 200-day SMA and the recent failure to sustain a convincing rally.

Edison International's MD&A reveals a complex financial landscape, significantly influenced by wildfire-related issues and regulatory proceedings. For the three months ended September 30, 2025, SCE's operating revenue increased by $552 million year-over-year, largely due to the implementation of the 2025 GRC final decision, which authorized an $880 million revenue requirement increase. However, wildfire-related claims, net of recoveries, increased by $295 million due to the Eaton Subrogation Settlement. For the nine months ended September 30, 2025, SCE's operating revenue increased by $498 million compared to 2024. SCE also recognized a recovery of $1,341 million in claim costs authorized under the TKM Settlement Agreement. SCE's net cash provided by operating activities for the nine months ended September 30, 2025, was $4,455 million, an increase of $418 million compared to 2024, primarily due to higher net income and non-cash items. However, regulatory assets and liabilities had a negative impact of $(1.4) billion due to current year net undercollections resulting from cost recoveries authorized under the TKM Settlement Agreement. The company faces ongoing challenges related to wildfire liabilities, as evidenced by the Eaton Fire and the need for potential contributions to the Continuation Account under SB 254, which are 'not recoverable through electric rates'. S&P downgraded both Edison International and SCE's long-term issuer credit ratings, reflecting concerns over wildfire-related risks, suggesting a cautious outlook.

Edison International's Q2 2025 earnings call presents a mixed outlook. While core EPS decreased to $0.97 from $1.23 year-over-year, management reaffirmed their confidence in meeting their 2025 EPS guidance and delivering a 5% to 7% core EPS CAGR through 2028. CEO Pedro Pizarro stated, 'we remain confident in our ability to meet our 2025 EPS guidance'. A key focus was the Eaton Fire, with investigations ongoing and SCE launching a wildfire recovery compensation program. CFO Maria Rigatti highlighted that SCE would not expect to see actual or estimated costs run through the income statement, aside from a small shareholder contribution associated with self-insurance. Discussions around California's AB 1054 regulatory framework and affordability legislation were prominent. While acknowledging potential challenges, Pizarro expressed confidence that 'California has ultimately generally gotten it right' and that policymakers will 'do the right thing'. The proposed decision in SCE's 2025 GRC generally aligns with their range case rate base forecast, though revisions are being sought. Overall, the call balances near-term challenges with long-term growth prospects and regulatory progress, resulting in a moderately bullish sentiment.

EIX's financial performance presents a somewhat positive but complex picture. Revenue has generally increased from $4.078B in Q1 2024 to $5.750B in Q3 2025, indicating top-line growth. However, the gross profit ratio has fluctuated, starting at 0.429 in Q1 2024, peaking at 0.470 in Q4 2023, and then decreasing to 0 in Q3 2025, suggesting potential issues with cost management in the most recent quarter. The operating cash flow has been volatile, with a significant increase to $2.122B in the latest quarter (Q3 2025) after a low of $329M in Q2 2024. Total debt has decreased from $36.653B in Q1 2024 to $2.939B in Q3 2025, signaling improved solvency and reduced financial risk. The inconsistent profitability, as reflected in the fluctuating gross profit ratio, is a concern, but the strong operating cash flow in the latest quarter and the reduction in total debt provide a more optimistic outlook. Overall, EIX demonstrates revenue growth and improved solvency, but needs to stabilize its profitability.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting effective cost management. Return on Equity (ROE) has improved, showcasing efficient capital allocation. While the Price-to-Earnings (P/E) ratio is elevated, it is potentially justified by the company's growth prospects. The Debt-to-Equity ratio has decreased, reflecting a healthier balance sheet and reduced financial risk. The current ratio is at a healthy level, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable combination of growth, profitability, and balance sheet strength, supporting a positive outlook for the next 12 months, although the high P/E ratio warrants close monitoring.