Hawaiian Electric Downgraded to Underperform by Jefferies with $12.50 Price Target
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Should l Buy HE?
Source: seekingalpha
- Rating Downgrade: Jefferies downgraded Hawaiian Electric from Hold to Underperform with a price target cut from $13.50 to $12.50, indicating a diminished market confidence in the stock's future performance amid unresolved issues.
- Valuation Reversion: Although Hawaiian Electric's stock has rebounded from a deep discount to near fair value, the analyst notes that the current valuation has priced in multiple unresolved key issues, reflecting an overly optimistic market outlook on future profitability.
- Lack of Fundamentals: The analyst emphasizes that despite the recent stock price increase, there have been no substantial fundamental changes, leading the market to misinterpret this volatility as a shift in fundamentals, which could mislead investors regarding future risks.
- Future Uncertainty: Ongoing uncertainties surrounding potential wildfire liabilities and the financing of the Maui wildfire litigation settlement obligations remain significant overhangs, posing threats to Hawaiian Electric's financial stability.
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Analyst Views on HE
Wall Street analysts forecast HE stock price to fall
2 Analyst Rating
0 Buy
2 Hold
0 Sell
Hold
Current: 14.510
Low
10.00
Averages
11.00
High
12.00
Current: 14.510
Low
10.00
Averages
11.00
High
12.00
About HE
Hawaiian Electric Industries, Inc. is a holding company that provides energy services. The Company’s subsidiaries are principally engaged in electric utility and non-regulated renewable/sustainable infrastructure businesses operating in the State of Hawaii. Its electric utility, Hawaiian Electric Company, Inc. (Hawaiian Electric), supplies power to approximately 95% of Hawaii’s population. The Company operates through the electric utility segment. Hawaiian Electric and its operating utility subsidiaries, Hawaii Electric Light Company, Inc. (Hawaii Electric Light) and Maui Electric Company, Limited (Maui Electric), are regulated electric utilities that provide essential electric service to approximately 95% of Hawaii’s population through the operation of five separate grids that serve communities on the islands of Oahu, Hawaii, Maui, Lanai and Molokai. Its subsidiary, Pacific Current, LLC, invests in non-regulated clean energy and sustainable infrastructure in the State of Hawaii.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Court Hearing Schedule: The court has set May 28 as the hearing date for final approval of the settlement, providing the company with a clear legal framework that will help restore confidence in its future operations.
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Customer Preparedness: The company emphasizes the importance of being ready for disruptions in service.
See More
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- Capital Expenditure Plans: Expected capital expenditures for 2026 range from $550 million to $700 million, increasing further to $600 million to $850 million in 2027 and 2028, reflecting ongoing investments in infrastructure and safety.
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See More
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- Reduced Overall Losses: The company's net loss was $45 million, significantly improved from $96 million in 2024, primarily due to reduced expenses related to strategic reviews and lower Maui wildfire costs, showcasing effective cost management.
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See More
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- Adjusted Earnings: Excluding certain items, the company reported adjusted earnings of $41.29 million or $0.24 per share, demonstrating robust core business performance and effective management in navigating market challenges.
- Revenue Increase: The company's revenue rose by 0.8% year-over-year to $805.82 million, compared to $799.18 million last year, reflecting its ability to maintain growth in a stable market environment.
- Financial Health: The overall improvement in financial metrics not only boosts investor confidence but also provides a stronger funding base for future expansion and investments, further solidifying its competitive position in the industry.
See More
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- Market Recovery: On Monday, the S&P 500 rose by 1%, the Nasdaq Composite increased by 1.2%, and the Dow Jones Industrial Average climbed by 0.8%, indicating a gradual restoration of investor confidence, particularly as oil prices experienced a slight decline.
- Surge in AI Demand: Nvidia CEO Jensen Huang announced at the annual GTC event that GPU demand reached $500 billion last year, with projections of at least $1 trillion by 2027, highlighting the company's robust growth potential in the AI sector.
- Leadership Overhaul: Fortune Brands Innovations appointed David Barry as interim CEO while initiating a search for a permanent successor, with former CEO Nicholas Fink accelerating his departure, indicating a significant strategic shift within the company.
- Settlement Approval: Hawaiian Electric announced that the U.S. District Court granted preliminary approval for a derivative settlement agreement with shareholders, involving a $100 million payment to resolve all pending derivative lawsuits, marking a reduction in the company's legal risks.
See More
Hawaiian Electric Reaches Derivative Settlement Agreement
- Preliminary Approval Granted: Hawaiian Electric announced that the U.S. District Court for the District of Hawaii has granted preliminary approval for a derivative settlement agreement with shareholders, which is expected to resolve all pending relevant derivative lawsuits, marking a significant reduction in the company's legal risks.
- Settlement Amount Established: The agreement stipulates a payment of $100 million to fully resolve all claims asserted in the derivative actions, a figure that not only helps eliminate legal uncertainties but also lays a foundation for the company's future financial stabilization.
- Court Hearing Schedule: The court has set May 28 as the hearing date for final approval of the settlement, providing the company with a clear legal framework that will help restore confidence in its future operations.
- No Admission of Liability: The settlement does not include any admission of liability, meaning that the company and related parties will receive a full release of all claims, which will assist in rebuilding the company's reputation among the public and investors.
See More
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Hawaiian Electric's Advisory: Hawaiian Electric is urging customers to stay prepared for potential extended power outages.
Customer Preparedness: The company emphasizes the importance of being ready for disruptions in service.
See More
Hawaiian Electric Industries 2025 Financial Report Analysis
- Declining Financial Performance: Hawaiian Electric Industries reported a net income of $123.1 million in 2025, a decrease from 2024, primarily due to rising operational and maintenance costs, interest expenses, and depreciation, indicating challenges in cost management.
- Renewable Energy Progress: The company achieved a 37% renewable portfolio standard in 2025, on track to meet the 40% statutory requirement by 2030, demonstrating its commitment to sustainability and strategic direction.
- Capital Expenditure Plans: Expected capital expenditures for 2026 range from $550 million to $700 million, increasing further to $600 million to $850 million in 2027 and 2028, reflecting ongoing investments in infrastructure and safety.
- Wildfire Settlement Progress: The company made significant strides in resolving the Maui wildfire tort settlement, with favorable court decisions supporting the settlement process, although ongoing uncertainty regarding outstanding appeals may delay the first settlement payment.
See More
Hawaiian Electric Reports Q4 2025 Profit Amid Lower Losses
- Net Income Performance: Hawaiian Electric reported a net income of $44 million for Q4 2025, slightly down from $46 million in Q4 2024, indicating a minor fluctuation in profitability while still maintaining a positive performance.
- Reduced Overall Losses: The company's net loss was $45 million, significantly improved from $96 million in 2024, primarily due to reduced expenses related to strategic reviews and lower Maui wildfire costs, showcasing effective cost management.
- Renewable Energy Progress: Hawaiian Electric achieved a 37% renewable portfolio standard in 2025, on track to meet the 40% statutory requirement by 2030, demonstrating the company's commitment to sustainability and strategic execution.
- Positive Stock Reaction: Following the earnings report, the company's shares rose by 1.5%, reflecting market optimism regarding its return to profitability, with a 46.2% increase in stock price over the past year, indicating strong investor confidence in future growth.
See More
Hawaiian Electric Reports Increased Q4 Profit
- Profit Growth: Hawaiian Electric Industries reported a fourth-quarter profit of $39.61 million, translating to $0.23 per share, which marks a significant increase from last year's $29.16 million and $0.17 per share, indicating a strong improvement in profitability.
- Adjusted Earnings: Excluding certain items, the company reported adjusted earnings of $41.29 million or $0.24 per share, demonstrating robust core business performance and effective management in navigating market challenges.
- Revenue Increase: The company's revenue rose by 0.8% year-over-year to $805.82 million, compared to $799.18 million last year, reflecting its ability to maintain growth in a stable market environment.
- Financial Health: The overall improvement in financial metrics not only boosts investor confidence but also provides a stronger funding base for future expansion and investments, further solidifying its competitive position in the industry.
See More
