Hawaiian Electric Industries Implements Wildfire Safety Strategy and Enhances Financial Position

Hawaiian Electric Industries is undergoing strategic changes with a focus on wildfire safety and financial enhancement. Legislation supports resilience with $500 million dedicated to investments, capping economic damages from wildfires. Analysts foresee a moderate upside with a "Hold" recommendation and GF Value indicating a potential downside. The estimated one-year price target averages $11.88, suggesting a 9.60% upside from the current stock price.

Hawaiian Electric Industries, Inc. (HEI) continues to make significant strides in its strategic initiatives aimed at enhancing financial resilience and wildfire safety. In its Q2 2025 earnings call, the company reported substantial progress in both areas, with the passage of key legislation and advancements in the Maui Wildfire Tort Litigation settlement.

Governor Josh Green signed three pieces of legislation into law, establishing an aggregate liability cap for economic damages from future wildfires and authorizing the securitization of $500 million for wildfire safety and infrastructure resilience investments [1]. Scott W. H. Seu, President and CEO, highlighted the company's ongoing efforts to improve its financial strength and resilience, noting that final court approval for the Maui Wildfire Tort Litigation settlement agreement is expected in early 2026.

HEI also announced its commitment to a simpler business model, with 90.1% of American Savings Bank and Pacific Current's largest asset sold, and further divestitures planned, including the remaining stake in American Savings Bank within the next year. The company's path toward financial strength and resilience is clearer than ever, as evidenced by upgrades from Moody's, S&P, and Fitch, although it will take time to regain investment grade status.

Scott T. DeGhetto, Executive VP, CFO & Treasurer, reported that the company generated net income of $26.1 million or $0.15 per share in the second quarter. The earnings were impacted by $5.4 million in asset sales and $5.2 million in pretax Maui Wildfire-related expenses. Consolidated core net income was $35.4 million for the quarter, with utility core net income at $42.5 million. The holding company and utility had approximately $44 million and $106 million of unrestricted cash on hand, respectively.

The first wildfire settlement payment of $479 million is expected in early 2026, with the company committed to using debt for the second payment. Management indicated that updates on consolidated rate base growth and CapEx outlook could come later this year, probably in the November time frame.

Analysts maintained a neutral and information-seeking tone, focusing on liquidity, settlement payment strategy, and forthcoming guidance. Management expressed confidence and optimism, with Seu stating that the company is in a stronger position than at any point over the past two years. The company highlighted the uncertainty around the timing for the Public Utilities Commission to establish the liability cap and the ongoing settlement process.

Hawaiian Electric Industries, Inc. is well positioned for sustained financial resilience and long-term growth as a dedicated utility operator, with improved credit outlooks, asset divestitures underway, and a plan for meeting settlement obligations.

References:
[1] https://seekingalpha.com/news/4482826-hei-signals-continued-progress-on-wildfire-litigation-settlement-as-company-advances-simpler