Investing.com -- Evercore ISI upgraded Hawaiian Electric Industries (NYSE:HE) to Outperform and raised its price target to $14, citing increasing confidence in the company's legal and financial positioning.
Analysts said HE is now in a stronger position compared to when it previously traded at a similar valuation, following a definitive wildfire settlement agreement, improved balance sheet, and access to capital markets.
Investor concerns over potential insurer disruptions to the settlement appear overstated, Evercore noted, as the Hawaii Supreme Court’s decision reduces the likelihood of successful legal challenges. Even if an appeal is attempted, it is unlikely to materially affect the process, the firm said.
Legislative efforts, including SB897 and HB982, could further support HE through wildfire insurance funding and liability protections. Evercore estimates HE’s FFO-to-debt ratio at 15%, in line with investment-grade metrics, suggesting credit rating upgrades could follow.
HE shares trade at a 45% discount on forward-year EPS, the firm noted, making the stock attractive as settlement clarity improves.
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