Edison International’s shares declined 5.9% in afternoon trading on Friday after California lawmakers blocked Governor Gavin Newsom’s proposal to restrict insurers from suing utilities over wildfire-related losses.
The legislative impasse leaves Southern California Edison, Edison International’s primary subsidiary, exposed to potential lawsuits from insurers seeking reimbursement for wildfire claims. The proposal’s failure follows a closed-door negotiation breakdown, intensifying regulatory uncertainty for California utilities.
Barclays downgraded Edison International from Overweight to Equal-Weight on Friday, citing elevated policy risk in California and the stock’s year-to-date outperformance among the state’s utilities. The bank also reduced its price target to $75 from $78. Earlier this week, Argus downgraded the stock to Hold from Buy, citing wildfire liability concerns.
Edison International’s shares closed down 4.76% at $70.17, extending losses from a 52-week high of $81.62 reached earlier in the year. The broader market slipped modestly, with the S&P 500 down 0.25% to 7,711.76, the Dow Jones falling 0.02% to 53,559.99, and the Nasdaq declining 0.5%.
Peer utility PG&E also fell sharply, dropping 7.52%, underscoring the sector-wide impact of the legislative outcome. The August 31 session deadline for lawmakers to advance the proposal had heightened expectations ahead of the talks, which ultimately collapsed on Thursday.
Morgan Stanley and Wells Fargo had previously adopted bearish stances on Edison International, reflecting growing caution over wildfire-related liabilities in California’s utility sector.
