Jefferies Maintains Underperform Rating on Hawaiian Electric Citing Structural Hurdles

Key Facts

1Jefferies reiterated its 'Underperform' rating on Hawaiian Electric with a $13.25 price target.

2The company faces a 280 basis point return-on-equity gap, with a proposed $170 million rebasing plan starting in 2027.

3The Act 258 liability cap rulemaking process is expected to take 18 to 24 months to complete.

Jefferies has reiterated its 'Underperform' rating on Hawaiian Electric (HE), maintaining a price target of $13.25 per share. The investment bank highlighted a persistent 280 basis point gap in the company's return on equity (ROE), signaling ongoing financial strain. While the utility has moved past immediate existential risks from wildfire liabilities, a proposed $170 million rebasing plan is not expected to commence until 2027. Furthermore, the regulatory process for establishing liability caps under Act 258 is projected to take between 18 and 24 months to finalize. Analysts noted a disconnect between the stock's recent climb above $14 and its underlying fundamental challenges. The report suggests that the lengthy timeline for structural recovery and regulatory clarity justifies a cautious valuation for the utility provider.