EDISON INTERNATIONAL (EIX): what the price requires
The current priced-in claim for EDISON INTERNATIONAL (EIX) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-13 · Source: https://boothcheck.com/report/EIX
Headline
| Field | Value |
|---|---|
| Ticker | EIX |
| Company | EDISON INTERNATIONAL |
| Current price | $76.03/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 29.7% |
| Multiple paid | 14x operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 5.5% cost of capital with 4% terminal growth over a 5-year stage (computed at the 5.5% minimum rate; the CAPM rate 5.5% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~4.4%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.31σ |
| cohort percentile (of 70 peers) | 13 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.76x | 5 | justifies |
| Earnings | 0.76x | 3 | justifies |
| Relative | 0.60x | 5 | justifies |
| Growth | 0.61x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 4.3%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $207.01 | 0.37x | yes | Exit EV/EBITDA: 8.7x / 10.7x / 12.7x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $137.89 | 0.55x | yes | P/E 15.31x (blended: sector 20x + trailing (TTM) 8x), scenarios: 12.6x / 15.3x / 18.0x (bear / base = sector held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $123.89 | 0.61x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $99.28 | 0.77x | yes | BV/sh $48.80, ROE (TTM) 18.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $139.92 | 0.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $65.46 | 1.16x | yes | Rev $19.6B, growth 13% (input: historical growth; tapered), Terminal P/S: 1.2x / 1.5x / 1.8x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $110.40 | 0.69x | yes | EPS $9.20, growth 1% (input: historical EPS growth), PEG=7.96 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $48.13 | 1.58x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $3.28B × (1−15%) / WACC 4.3% → EPV (no growth) |
| Residual Income | Asset | $137.59 | 0.55x | yes | BV $48.80 + 5yr PV of (ROE (TTM) 18.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $100.50 | 0.76x | yes | √(22.5 × EPS $9.20 × BVPS $48.80) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $116.25 | 0.65x | yes | EBITDA $6.87B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $296.85 | 0.26x | yes | EPS $9.20 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $16.44 | 4.62x | yes | BV $48.80 × (ROIC 1.4% / WACC 4.3%) |
| P/Sales Sector | Relative | $126.67 | 0.60x | yes | Revenue $19.61B × sector P/S 2.5x |
| PEG Fair Value | Relative | $345.00 | 0.22x | yes | EPS $9.20 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $99.46 | 0.76x | yes | EPS $9.20 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $41.4b |
| Net debt / NOPAT (after-tax) | 9.00x |
| Net debt / operating income (pre-tax) | 7.64x |
| Interest coverage | 3.0x |
| Share count CAGR (dilution) | 0.3% |
| Burning cash | no |
Bullet Takeaways
Edison trades near 7.8x trailing EPS of $9.20 and about 13x operating income, far below every method that values the regulated business (asset and relative frames mark near $99 to $140), because the price embeds an unknown California wildfire liability rather than the 5% to 7% EPS growth management guides to through 2030.
The Eaton Fire is the dominant overhang: SCE has offered roughly $700 million to about 30,000 claimants but cannot reliably estimate the ultimate liability, and any fines and penalties are not recoverable from insurance, the Wildfire Fund, or rates, though the Fund has confirmed the fire as a covered event for eligible claims.
The risk is amplified by leverage (net debt near 7x operating income) and resolved by regulators and courts, not operations; the bull case rests on the capital plan compounding rate base at an authorized 4.71% cost of debt while 93% grid hardening and the Wildfire Fund contain the downside, and the bet is essentially whether the uninsured slice of the Eaton liability stays manageable.
Bull Case
Look at how Edison International deploys capital and the bull case comes into focus: this is a utility plowing billions into a growing rate base, and the market is letting you buy that growth at a distressed multiple. Edison reaffirmed 2026 core EPS guidance of $5.90 to $6.20 and reiterated a 5% to 7% core EPS compound growth target through 2030, underpinned by rising power demand, electrification, and a multi-billion-dollar capital plan. For a regulated utility, that capital plan is the engine of value: every dollar invested in the grid, once approved, earns a regulated return for decades. The 10-K lays out the financing mix that supports it, with SCE's 2026 authorized cost of long-term debt at 4.71% and preferred equity at 6.89% under the final regulatory decision (FY2025 10-K, accession 0000827052-26-000012). Borrowing near 4.7% to fund assets earning a higher allowed return is the spread that compounds shareholder value.
The stock is cheap against every method that values the regulated business. The simple excess-return model marks near $99, the two-stage version near $140, residual income near $138, the relative P/E frame near $137, and the Graham number near $100, all far above the $72 price (June 27, 2026). On trailing EPS of $9.20 the stock trades near 7.8x earnings, an extraordinarily low multiple for a utility whose return on equity runs near 18.8%. Inverting the price, the market pays about 13x company-wide operating income, a multiple so low it sits below what even a 5% annual operating-profit decline would warrant. The market is pricing in deterioration, not the 5% to 7% growth the company guides to.
The wildfire overhang, while real, is being actively managed down. Southern California Edison has completed 93% of its physical grid-hardening work in high-fire-risk areas, and it carries customer-funded self-insurance and access to the California Wildfire Fund. The 10-K confirms SCE has $1.0 billion of customer-funded self-insurance coverage and that the administrator confirmed the Eaton Fire is a covered event eligible for reimbursement from the Wildfire Fund (FY2025 10-K, accession 0000827052-26-000012). The Fund is the post-2019 California mechanism specifically built to let utilities survive catastrophic fires without the equity wipeout that hit the sector before it existed. If the Eaton liability lands within the Fund's capacity and SCE is found to have acted prudently, the discount to the methods is the opportunity.
Bear Case
The structural advantage that normally makes a utility safe, the regulated near-monopoly that produces bond-like cash flows, is exactly what California wildfire liability is eroding for Edison. A utility is supposed to be the lowest-risk way to own infrastructure; Edison is instead a leveraged bet on the cost and recoverability of a catastrophe. The January 2025 Eaton Fire is the open wound: management has offered roughly $700 million to claimants but still cannot reliably estimate the ultimate liability, citing roughly 30,000 plaintiffs and an extended statute of limitations for property damage. An unbounded liability of unknown size is the antithesis of the predictable utility the price-to-book and dividend models assume.
The erosion is concrete in the parts of the liability that cannot be passed on. Any fines and penalties tied to the Eaton Fire will not be recoverable from insurance, from the Wildfire Fund, or through electric rates. That carve-out matters: the Wildfire Fund covers eligible claims if SCE is found prudent, but if the investigation concludes SCE's equipment caused the fire through imprudent operation, penalties fall directly on shareholders, and even covered claims must first run through SCE's own self-insurance and the Fund's shared capacity. The 10-K itself flags the risk that the company could be prevented from executing its strategy by regulatory delay or lack of cost-recovery approval (FY2025 10-K, accession 0000827052-26-000012), which is the core fragility: in California, the regulator and the courts, not the operations, determine the outcome.
The balance sheet amplifies every bit of that uncertainty. Net debt sits near $41 billion, almost 7x trailing operating income, with interest coverage of about 3.4x. That leverage is normal for a utility funded by rate base, but it is dangerous when a multi-billion-dollar contingent liability sits on top of it, because a large uninsured loss erodes the equity directly while the debt stays fixed. The market's roughly 13x operating multiple and the deep discount to every method are not irrational; they are the price of a liability the company itself says it cannot size. The bear conclusion is that the cheapness is real but earned: until the Eaton liability is bounded and the prudence question is resolved, the regulated-utility safety that the bull case leans on is exactly what is in doubt.
Valuation
Edison is a regulated utility trading at a distressed multiple, and the gap between the methods and the price is entirely about wildfire risk. The asset-based frames mark well above the price: simple excess return near $99, two-stage excess return near $140, residual income near $138. The relative and growth frames agree: relative P/E near $137, the exit-multiple DCF near $204, the Graham number near $100, and the EV/EBITDA frame near $116. On trailing EPS of $9.20 the stock trades near 7.8x earnings against a roughly 18.8% return on equity.
Inverting the price confirms how little growth is embedded. At $71.92 the market pays about 13x company-wide operating income, a multiple so low the price sits below what even a 5% annual operating-profit decline would warrant, read as a bound rather than a forecast. The solve carries a low-reliability flag and runs at a 5.5% minimum cost of capital, so treat it directionally, but the direction is clear: the market is pricing in deterioration, while management guides to 5% to 7% core EPS growth through 2030.
The entire discount is a wildfire-liability discount. The methods say the regulated franchise is worth well over $100 per share; the market pays $72 because it is subtracting an unknown, potentially multi-billion-dollar Eaton Fire liability and the risk that some of it is not recoverable. The valuation question is therefore not whether the business is cheap, the models clearly say it is, but how large the uninsured-and-unrecoverable slice of the Eaton liability turns out to be, and whether SCE is found prudent. The fair-value frame the engine produces equals the current price on a below-floor, low-reliability solve, which simply reflects that the market is paying for almost no growth. A buyer is making a probabilistic bet that the liability lands within the Wildfire Fund and self-insurance capacity, in which case the discount to the methods closes; if the uninsured penalties are large, the leverage means the downside is real.
Catalysts
The most recent print was the first-quarter 2026 report. Sales were $4,103 million, net income was $531 million, and adjusted core EPS was $1.42. Edison reaffirmed full-year 2026 core EPS guidance of $5.90 to $6.20 and reiterated a 5% to 7% core EPS compound growth target through 2030, supported by electrification, rising power demand, and its capital plan. The quarter included a $35 million charge ($25 million after-tax) from amortization of SCE's Wildfire Fund contributions.
The Eaton Fire resolution is the single most important catalyst, and it will unfold over multiple quarters. SCE's voluntary Wildfire Recovery Compensation Program (open through November 30, 2026) has offered roughly $700 million to claimants and is designed to settle faster than litigation. The events that matter are the official cause determination, any prudence finding by the California regulator, the eventual sizing of the total liability against roughly 30,000 plaintiffs, and how much falls within the Wildfire Fund and self-insurance versus on shareholders.
The forward thesis tracks wildfire resolution, regulation, and the capital plan. The supportive drivers are the multi-billion-dollar rate-base growth, the authorized cost of capital, and 93% completion of grid hardening in high-risk areas. The risks are the unbounded Eaton liability, the non-recoverable fines and penalties, regulatory delay or denial of cost recovery, and the leverage that amplifies any uninsured loss. Watch the cause and prudence determinations, the take-up and total cost of the compensation program, the next California rate-case and cost-recovery decisions, and confirmation that guidance holds, since the entire discount to the valuation methods will close or persist based on how the wildfire liability is bounded.
Sources: Edison International Q1 2026 results and 8-K (sec.gov, stocktitan.net); Edison International Q1 2026 earnings and guidance (Simply Wall St, Globe and Mail); Eaton Fire compensation program (Edison newsroom, stocktitan.net); SCE wildfire cost commentary (Utility Dive).
Peer Cohorts (Per Segment, With Filing Citations)
Electric utility (Southern California Edison) (reported)
- NEE (NextEra Energy Inc)
- (no filing in the citation store)
- DUK (DUKE ENERGY CORPORATION)
- (no filing in the citation store)
- SO (SOUTHERN CO)
- (no filing in the citation store)
- AEP (AMERICAN ELECTRIC POWER CO INC.)
- (no filing in the citation store)
- D (DOMINION ENERGY, INC)
- (no filing in the citation store)
- EXC (EXELON CORPORATION)
- (no filing in the citation store)
- XEL (XCEL ENERGY INC)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.