Reiterating his bullish case for Edison International (EIX), Zacks energy sector analyst Jon Kolb explains why the future looks bright for the power utility company:
'Solid projected core earnings growth in 2007-08, driven by improved performance in unregulated power generation and energy trading, a solid base of stable utility operations, higher price realizations, ongoing alternative energy projects, balance sheet strength, and a relatively cheap earnings-based valuation collectively support our bullish outlook for Edison International.
'With the company's strong fundamentals continuing to improve, as reflected in our projected core earnings with above-average growth in 2007-08, we remain bullish on EIX common stock. As of this report, EIX trades at only 15.4x and 14.7x, respectively, our 2007 and 2008 earnings per share estimates.
'Accordingly, with a predominantly bullish outlook, in our view, we maintain our BUY recommendation on EIX with a six-month target price of $61.25, or 16.7x our current-year 2007 EPS estimate and 16.0x our forward 2008 estimate. Price appreciation to our near-term valuation, coupled with the stock's recently increased $0.29 per share quarterly dividend deemed to be sustainable and secure based upon very reasonable projected payout ratios represents annualized total return potential of 19.8%.'
Read the full analyst report on EIX.
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