Hawaiian Electric Industries, Inc.
HE · NYSE
Analyst ratings
sell · 2 ratings
| Date | Firm | Action | Rating | Price target |
|---|---|---|---|---|
| July 6, 2026 | Jefferies | Maintains | Underperform | $11.75 |
| June 25, 2026 | Barclays | Maintains | Equal-Weight | $13.00 |
| March 2, 2026 | Barclays | Maintains | Equal-Weight | $14.00 |
| January 26, 2026 | Barclays | Maintains | Equal-Weight | $13.00 |
| January 20, 2026 | Jefferies | Downgrades | Underperform | $12.50 |
| January 15, 2026 | Barclays | Maintains | Equal-Weight | $11.00 |
| December 3, 2025 | Jefferies | Maintains | Hold | $12.00 |
Wildfire liability settlement impact on long-term financial recovery
The $1.99 billion Maui wildfire settlement has largely been priced in, with the first annual payment of ~$479 million made in April 2026 prompting Moody's to upgrade HE's credit rating. The structured four-year payment plan provides a clear path to financial normalization, with the settlement curve inflecting positively after the final payment in 2029.
The wildfire settlement continues to weigh heavily on operations. Q1 2026 EPS of $0.18 missed the $0.28 forecast, with storm-related costs and elevated operational expenses compounding existing financial pressures, raising concerns about whether earnings can reliably recover while large annual settlement payments remain outstanding through 2029.
Rate rebasing and revenue growth potential
Hawaiian Electric filed a rate rebasing request in March 2026 that could add $170 million in annual revenue — a 5.3% consolidated increase — phased across 2027 and 2028 and locked in through 2032. This regulatory mechanism, combined with a forecasted revenue growth of 3.2% per annum, underpins a compelling long-term earnings recovery thesis.
Despite the pending rate rebasing, Jefferies maintains an Underperform rating and cut its price target to $11.75, citing revenue uncertainty. The current return on rate base of only 6.5% versus the allowed maximum of 9.5% suggests significant execution risk before HE can fully capture its regulatory earnings potential.
Stock valuation relative to fair value and earnings outlook
Despite recent headwinds, HE's stock has risen over 27% year-over-year and carries a remarkably low PEG ratio of 0.17, suggesting the shares remain attractively priced relative to their growth trajectory. EPS is forecast to grow 8.5% per annum, offering meaningful upside for patient investors willing to look past near-term settlement costs.
Jefferies lowered its price target to $11.75 and flags that HE trades above InvestingPro's Fair Value estimate, landing the stock on its most overvalued watchlist. With shares trading at $13.63 and consensus 2028 EPS of just $1.09, the current valuation leaves limited margin of safety given ongoing financial pressures and earnings misses.