Edison International heads into the final days of August with a notable contradiction at its core: short sellers are abandoning positions at their fastest pace in months, yet another analyst just stepped off the bullish side.
The most striking development in positioning is the pace of short covering. Short interest dropped nearly 9% in a single session on August 25, pulling the overall level down to 3.4% of the free float — a decline of close to 11% across the week and more than 9% over the past month. That's a meaningful retreat from the mid-July peak above 15.7 million shares. Borrow conditions remain entirely unconstraining: availability is running at roughly 3,620% — more than 300 million shares ready to lend against the roughly 12.9 million currently borrowed. The cost to borrow is just 0.48%, up about 8% on the week but still negligible in absolute terms. This is not a lending market under any stress. Options traders are more guarded, however. The put/call ratio is running at 1.35, above its 20-day average of 1.26, though the z-score of 0.73 keeps it well short of alarming. It's a modestly defensive tilt, not a panic hedge.
The Street, meanwhile, remains split — and the fracture just deepened. Argus Research downgraded EIX to Hold from Buy this morning, the most recent in a sequence of retreating bulls. That follows Barclays' reversal in late July, when it cut to Equal-Weight from Overweight with a $75 target. Morgan Stanley's David Arcaro lowered his target to $65 on August 21, the most bearish print on the board. Against those moves, Mizuho's Anthony Crowdell stands largely alone with an Outperform and an $86 target raised on July 31. The consensus has settled at Hold, with four buys against nine hold ratings and no disclosed sells — though the direction of travel is clearly toward more caution. The stock's PE near 11x and EV/EBITDA around 8.4x have compressed modestly over the past 30 days, consistent with a market that is pricing in continued uncertainty rather than a clean re-rating. EIX's dividend score ranks in the 92nd percentile of the ORTEX universe, which provides a floor argument for income-oriented holders even as the growth and quality scores remain uninspiring.
The wildfire liability question is doing the real work here. Regulatory outcomes in California remain the variable that separates the $65 bears from the $86 bulls, and no quarterly earnings print resolves that. The most recent report in late July — which sent the stock down nearly 7% the next day and almost 15% over the following five sessions — showed reaffirmed full-year guidance but did nothing to close the gap on legislative risk. The stock has since recovered to $74.78, up 1.5% on the week, though it trails most utility peers: PCG gained 3% on the week, while XEL, OGE, and AEP all fell between 2% and 3%, making EIX's performance look comparatively firm even if uninspiring in absolute terms.
The Q3 earnings date is set for October 30. Between now and then, the next observable catalyst is any legislative signal out of Sacramento on wildfire liability reform — that single variable, more than any short-covering pace or options ratio, is what will determine whether the bulls or the bears are proven right.
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