Edison International is in the early innings of a long-duration rate base compounding story that is being priced against a still-unresolved tail risk on the Eaton Fire. The first half of 2026 demonstrated that the 2025 General Rate Case final decision is finally flowing through to earnings, with SCE core earnings up $198 million in the second quarter and $213 million in the first half, while GAAP net income at the parent swung from $1,779 million in the first half of 2025 to $1,065 million in the first half of 2026 because of the absence of the prior-year Thomas-Koenigstein-Montecito settlement. With a $37.5 billion to $40.6 billion 2026 to 2030 capital program and a weighted average rate base projected to grow from $50.8 billion to $67.9 billion, the equity story is fundamentally a story about how much of that cap Edison International can fund with internally generated cash, securitization, and rate base growth without forcing further dilution at the parent.
The investment case has two binding variables that any reader needs to internalize before assigning a multiple. The first is the Wildfire Fund and SB 254. The April 2026 California Earthquake Authority report to the legislature formally diagnosed what the market has long understood: without further legislative or regulatory action, the structural risk to California investor-owned utilities is severe enough to threaten credit downgrades and curtail access to capital. Edison International has already seen its consolidated debt to total capitalization ratio drift to 0.66 to 1, well within the 0.70 to 1 covenant but moving in the wrong direction. The second is the Eaton Fire itself. As of June 30, 2026, Edison International and SCE have recorded $1.6 billion in settlement losses, with expected recoveries of $917 million from customer-funded self-insurance, $645 million from the Initial Account of the Wildfire Fund, and $70 million through FERC rates. The net after-tax charge to earnings so far is only $9 million because of the recovery structure, but a January 2027 bellwether trial and an eventual CPUC prudency proceeding are the events that will determine whether the company has truly contained the loss or is still absorbing it.
Our read is that the equity is fairly priced between roughly $50 and $60 on a 12-month view, with the upside depending on a clean bellwether outcome and continued rate base execution, and the downside depending on a negative ignition-prudency finding or a Wildfire Fund capacity shock. The report that follows works through the business, the moat, the financial evidence, the execution plan, the risks, the multiple, and the final judgment.