Shares of Edison International fell 5.9% in afternoon trading on Thursday after California lawmakers blocked a proposal to prevent insurers from suing utilities over wildfire-related losses.
The legislation, which would have barred subrogation claims against utilities such as Edison’s Southern California Edison unit, failed to advance before the August 31 deadline. Negotiations held behind closed doors collapsed, leaving the company exposed to uncapped liability from insurer lawsuits linked to wildfire events.
The stock had recently reached a 52-week high of $81.62 but pulled back sharply following the news. Peer utility PG&E also declined on the same development.
Analysts responded with downgrades and target reductions. Barclays cut Edison International from Overweight to Equal-Weight, lowering its price target to $75 from $78. The firm cited escalating regulatory uncertainty in California and the stock’s year-to-date outperformance among California utilities. Argus downgraded the shares from Buy to Hold on August 26, citing wildfire liability risks. Morgan Stanley and Wells Fargo had previously taken bearish actions.
The broader U.S. equity market showed limited reaction, with the S&P 500 down 0.3%, the Dow Jones down 0.1%, and the Nasdaq down 0.5%.
