The firm said it raised its rating on the public utilities company based on Edison's ability to generate strong cash flow.
Separately, TheStreet Ratings team rates EDISON INTERNATIONAL as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate EDISON INTERNATIONAL (EIX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EIX's revenue growth has slightly outpaced the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.92, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.19 is very weak and demonstrates a lack of ability to pay short-term obligations.
- EDISON INTERNATIONAL's earnings per share declined by 21.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, EDISON INTERNATIONAL reported lower earnings of $2.67 versus $4.57 in the prior year. This year, the market expects an improvement in earnings ($3.71 versus $2.67).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The gross profit margin for EDISON INTERNATIONAL is currently lower than what is desirable, coming in at 33.22%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 6.90% is above that of the industry average.
- You can view the full analysis from the report here: EIX Ratings Report