27 Dec

How Edison International Stock Is Valued after Its Epic Fall

WRITTEN BY Vineet Kulkarni


The recent correction in Edison International (EIX) stock has made it look significantly cheap compared to its peers. On December 21, 2017, it was trading at an EV-to-EBITDA valuation of 8.5x—compared to its five-year historical valuation of close to 8x. Broader utilities are trading at a valuation multiple around 11x. Edison International seems to be trading at a discounted valuation relative to its peers. It seems to be trading at a premium compared to its historical average.

Sempra Energy (SRE) is trading at a valuation of 14x, while PG&E (PCG) is near 6.5x.

How Edison International Stock Is Valued after Its Epic Fall

PE multiple

Edison International stock is trading at a PE (price-to-earnings) multiple of 14.4x. Broader utilities’ (XLU) PE multiple is near 20x.

PG&E and Edison International’s discounted valuation might create an opportunity for aggressive investors. However, uncertainty regarding the fire probe might continue to drive these stocks going forward.

To learn more, read An Investor’s Guide: A Look at the 10 Largest S&P 500 Utilities.

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