Edison International just posted a Q1 earnings beat — revenues and EPS both came in ahead of estimates — and the stock is down on the week anyway. That disconnect is the story right now.
The week's most interesting development is the sharp rebuild in short positioning. Short interest jumped nearly 20% over five trading sessions, climbing from around 9.5 million shares to 11.3 million, pushing SI as a percentage of free float to roughly 2.9%. The move reverses what had been a steady decline through most of March and early April, when shorts had pulled back from a peak of close to 13.2 million shares in mid-March. The borrow market remains loose — availability is not a constraint here. Cost to borrow has actually eased, falling around 11% on the week to about 0.35% annualised, one of the cheapest levels of the past six weeks. That low cost means new short positions were added cheaply and without friction, which underlines the conviction behind the build rather than any mechanical squeeze dynamic. The ORTEX short score is a modest 34.8, sitting below the midpoint of its range — not elevated, but creeping higher each day this week.
Options positioning has flipped notably. The put/call ratio has dropped to 0.92, meaningfully below its 20-day average of 1.16 and nearly a full standard deviation lighter on the protective-put side. For most of April through mid-month, PCR ran above 1.3-1.5 — investors were heavily hedged. That hedging has unwound sharply over the past two weeks. The reading is still well within the annual range (52-week high 1.50, low 0.36), so this is not an extreme signal in either direction, but the directional shift is clear: options traders moved into the print with less downside protection than they carried for most of the month.
The Street picture is mixed. Multiple analysts moved this week. Barclays maintained its Overweight but trimmed its target a dollar to $77 after the print, while Morgan Stanley, holding an Underweight, nudged its target down to $70 from $71. The most notable pre-earnings action came from Seaport Global, which downgraded to Neutral from Buy last week, and Bank of America, which maintained Buy but cut its target to $78 from $80. Truist Securities initiated coverage at Hold with an $82 target. The direction of travel is clear — targets are coming down or being set conservatively, even where the rating is positive. The consensus mean target is $75.68, implying around 11.5% upside from the current $67.94. The P/E multiple is 10.9x and has compressed around 0.7 turns over the past month. P/B is 1.41x, also drifting lower. The EPS surprise factor score ranks in the 72nd percentile — a track record of beating that the Q1 print continued — but the valuation contraction suggests the market is discounting something beyond near-term earnings delivery.
The Eaton Fire overhang remains the central issue framing the fundamental debate. Edison's Southern California Edison unit disclosed this week that relief provided to community members affected by the fire now exceeds $500 million. That liability trajectory — and the regulatory and legal path around it — is what the bulls and bears are really arguing about, not the utility's operating performance. Factor scores reflect the bifurcation: the dividend score ranks in the 92nd percentile, and EV/EBIT percentile is 81st, pointing to solid underlying value. But the stock has slid 3.4% over the past month and 2.1% this week, closing Wednesday flat on the day at $67.94, lagging a utility peer group that broadly gained ground. PCG fell 4.2% on the week — its own wildfire liability situation drawing a parallel — but OGE, LNT, FE, XEL, and AEP all closed the week between 0.5% and 2.8% higher. EIX is clearly being treated as a separate risk bucket from the broader sector.
The next earnings event is pencilled in for July 28. Between now and then, what matters is not the operating financials — the Q1 beat settled that question for at least another quarter — but the pace and scale of wildfire liability crystallisation, and whether the regulatory framework provides any relief. The short rebuild into a headline beat is a clear signal that the market still sees unresolved tail risk that the income statement alone cannot answer.
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