Edison International has good prospects in 2021

Ticker: ED

Author: Stock Analyst  Date: 2021/04/22

On Tuesday, April 27, Californian power grid company Edison International will publish its results for the 1st quarter of 2021. Bloomberg consensus on refined EPS for January-March is $0.78 (+ 23.8% YoY) per share.

Edison International at the end of 2020 was one of the "cleanest" US electricity companies with a 35% share of renewable energy in the networks and no coal plants in the portfolio. In addition, Edison International is the operator of Charge Ready 2, the largest electric vehicle charging infrastructure program in the United States, at a cost of $ 436 million.

The company's management does not provide forecasts for the adjusted EPS for the current year, which is largely due to the need for a final settlement of emergency costs associated with wildfires, as well as awaiting the final tariff decision of the CPUC regulator regarding the Southern California Edison division.

Nevertheless, we have a positive view on the growth prospects of Edison International's financial indicators: revenue growth driven by recovery in demand in 2021 is projected at 2.6% YoY, and EBITDA in 2021 due to the normalization of other operating expenses may well exceed the $ 5 mark bn. We forecast 2021 EPS at $ 4.8 and net income for the same fiscal period of $ 1.8 bn. Under these conditions, we forecast EPS for the company in the range of $ 0.77-0.80 (+ 23.8- 27% y / y). Our current recommendation for shares is “Buy” with a target price of $ 71.48 for March 2022, which corresponds to a potential of 16.9% excluding dividends. The expected dividend yield in 2021 is about 4.4%.