EIX to Gain From Infrastructure Upgradation & Renewable Expansion

Edison International EIX has been investing to strengthen its infrastructure, modernize the grid, and expand its renewable clean energy portfolio to deliver reliable, resilient energy to its growing customer base.

The company’s long-term (three to five years) earnings growth rate is projected at 10.93%.

Tailwinds

Edison International is strategically positioned to benefit from rising electricity demand, driven by the expansion of AI-based data centers and rapid electrification of transportation and buildings. To meet this increasing electricity demand, like other utility providers, the company follows a systematic capital investment strategy to strengthen its infrastructure to provide safe and resilient electricity, thereby boosting customer reliability.

The company expects a long-term capital investment of $28-$29 billion during the 2025-2028 period. Of this projected spending, nearly 97% is allocated to critical transmission, distribution, and generation capacity, which will enhance grid resilience.

To capitalize on the expanding electric vehicle (EV) market driven by rapid transportation electrification, Edison International launched its Charge Ready 2 program in 2020 — the largest light-duty EV charging program offered by an investor-owned utility in the United States.

Headwinds

EIX faces an ongoing and growing wildfire threat due to climate change. In the recent past, California has been experiencing unprecedented weather conditions and SCE's service territory remains susceptible to additional wildfire activity in 2025 and beyond. Challenging weather and fuel conditions across California increase wildfire risk, including the potential for allegations that SCE’s equipment was involved in an ignition, which could elevate financial exposure and disrupt operations.

Price Performance

Over the past six months, EIX shares have risen 13.6%, which beat the industry’s growth of 7.3%.

Zacks Rank & Stocks to Consider

EIX currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are Ameren Corporation AEE, Dominion Energy, Inc. D and NiSource Inc. NI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AEE, D and NI have delivered an average earnings surprise of 0.22%, 12.72% and 3.23%, respectively, over the past four quarters.

The Zacks Consensus Estimate for AEE, D, and NI’s 2025 EPS indicates year-over-year growth of 8.21%, 22.74% and 7.43%, respectively.

 

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This article originally published on Zacks Investment Research (zacks.com).

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