Jefferies downgraded Edison International to Underperform from Hold, citing greater exposure to fire liabilities and weaker prospects for legislative relief. The firm cut its price target to $42 from $53.
The September bill-signing deadline has passed, reducing the likelihood that lawmakers will hold a special session on the issue before the November elections. Jefferies believes the market has not fully priced in potential liabilities related to the Eaton fire.
The downgrade follows recent price-target cuts by UBS and BofA Securities, which also cited the lack of progress on wildfire liability reform during California’s legislative session.
Edison International shares have fallen 25% over the past six months and are trading near their 52-week low. Uncertainty over the financial impact of wildfires continues to weigh on investor sentiment.