EIX Reports Today as Short Interest Climbs to Year High

Edison International, the Southern California electric utility that has carried wildfire liability as a permanent feature of its investment case, reports Q3 results today after the close against a backdrop that has shifted since the two articles published earlier this week.

Short interest has moved in the opposite direction from where it stood on October 26. The position has climbed back to 4.7% of free float, roughly 18.2 million shares, the highest level in at least a year, after ticking up 6.2% over the past week. That reversal matters: prior coverage noted shorts easing from a mid-October peak, but the latest data shows they have rebuilt to match those highs. The borrow market remains relaxed. Cost to borrow is 0.44%, up about 5% on the week but still low in absolute terms. Availability is extremely loose at 3,586%, meaning lenders hold far more shares than are currently borrowed, with no squeeze pressure in the lending pool.

Options positioning has not followed the short interest upward. The put/call ratio closed at 0.65 on October 29, near the 52-week low of 0.65 hit on October 23, and more than a standard deviation below its 20-day average of 0.77. Call buyers continue to dominate, a posture that has persisted through the entire week even as short sellers added back positions. The gap between those two signals is the clearest tension in the setup: short sellers are rebuilding exposure while options traders remain the most bullish they have been in a year. The stock gained 0.9% on Thursday to $59.38, up 2.6% on the week, outpacing the flat-to-slightly-positive moves from peers PCG, XEL, DUK and SO.

The analyst picture has grown more cautious over the past month. Morgan Stanley kept its Underweight rating last week while raising its target marginally to $62. JP Morgan and Barclays both trimmed targets earlier in October, with Barclays cutting sharply from $75 to $53. Jefferies downgraded to Underperform on October 2, cutting its target to $42. HSBC initiated at Hold with a $56.50 target on October 22. The consensus sits at Hold with a mean target of $62.90, about 6% above the current price. With the stock trading at a trailing P/E of 9.2 and an earnings yield in the 88th percentile of its sector, value-oriented investors see room; the bear camp points to unresolved wildfire liability as the reason those multiples stay compressed. The one available earnings reaction data point is instructive: after July's Q2 release, EIX fell 6.7% on the day and extended to a 14.5% loss over the following five sessions.

Today's print will test whether the liability picture from Southern California's fire season has changed enough to justify the recovery in the share price, or whether the rebuilt short position turns out to be the better-positioned side of the trade.