We came across a bullish thesis on Hawaiian Electric Industries, Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on HE. Hawaiian Electric Industries, Inc.'s share was trading at $15.87 as of January 29th. HE’s trailing and forward P/E were 7.28 and 17.36, respectively according to Yahoo Finance. NexGen (NXE) Ends Losing Streak as US Govt Urges Uranium Expansion ermess/Shutterstock.com Hawaiian Electric Industries, Inc., together with its subsidiaries, engage ...

Core Viewpoint - Hawaiian Electric's stock has been downgraded by an analyst, reflecting concerns about its pricing and business uncertainty [2][3]. Company Summary - Hawaiian Electric's shares fell by 2.5% following a downgrade to "underperform" from a previous "buy" recommendation by Jefferies' analyst Julian Dumoulin-Smith [1][2]. - The new price target for Hawaiian Electric's stock is set at $12.50 per share, reduced by $1 from the previous target [3]. - The current market capitalization of Hawaiian Electric is $2.5 billion, with a current stock price of $14.09 [4][5]. Industry Context - The uncertainty surrounding Hawaiian Electric's pricing and legislative decisions may affect its competitiveness compared to other electric utility companies [3][5]. - Rising concerns about affordability in the utility sector suggest that Hawaiian Electric is not alone in facing pressure regarding its pricing strategies [5].

Core Insights - Three stocks in the utilities sector are showing signs of being overbought, which may concern momentum-focused investors [1] Group 1: Stock Performance and Indicators - Enlight Renewable Energy Ltd (NASDAQ:ENLT) has an RSI value of 71.9, indicating it is overbought. The stock gained approximately 27% over the past month, closing at $50.35 [5] - Hawaiian Electric Industries Inc (NYSE:HE) has an RSI value of 71.1. The stock rose about 11% in the last five days, closing at $13.66 [5] - Ellomay Capital Ltd (NYSE:ELLO) has an RSI value of 75.5, also indicating it is overbought. The stock gained around 27% over the past month, closing at $28.40 [5] Group 2: Analyst Ratings and Price Targets - JP Morgan analyst Mark Strouse downgraded Enlight Renewable Energy from Neutral to Underweight, maintaining a price target of $35 [5] - Hawaiian Electric reached a $47.75 million shareholder settlement related to the Maui wildfires, which may have influenced its recent stock performance [5] - Ellomay Capital reported third-quarter earnings of 93 cents per share, an increase from 52 cents per share in the previous year [5]

Core Viewpoint - Halper Sadeh LLC is investigating potential breaches of fiduciary duties by officers and directors of Hawaiian Electric Industries, Inc. (NYSE: HE) towards shareholders [1] Group 1: Legal Actions and Shareholder Rights - Long-term shareholders of Hawaiian Electric may seek corporate governance reforms, return of funds, court-approved financial incentives, or other benefits [2] - Shareholder involvement is crucial for improving company policies and practices, leading to enhanced shareholder value [3] Group 2: Firm's Background and Services - Halper Sadeh LLC represents global investors affected by securities fraud and corporate misconduct, having recovered millions for defrauded investors [4]

Core Insights - The company has the potential to survive until it pays a total of $1.91 billion due to a regulatory decision related to its partial responsibility for the Maui fires in 2023 [1] Financial Analysis - The total amount the company is expected to pay is $1.91 billion, which is a significant financial burden [1]

Core Insights - The company has the potential to survive until it pays a total of $1.91 billion due to a regulatory decision related to its partial responsibility for the Maui fires in 2023 [1] Financial Analysis - The total amount the company is expected to pay is $1.91 billion, which is a significant financial burden [1]

Core Viewpoint - Hawaiian Electric Industries experienced a significant stock price increase of 10.80% due to its inclusion in the S&P SmallCap 600 Index, driven by market enthusiasm rather than any proprietary news [1][2]. Group 1: Index Inclusion Impact - S&P Global Indices announced that Hawaiian Electric will be added to the S&P SmallCap 600 Index as part of its quarterly rebalancing, effective before trading on December 22 [2][4]. - A total of 14 stocks, including Hawaiian Electric, were added to the index, while 13 stocks were removed [4]. - The inclusion in the index is expected to attract investment from index funds, benefiting Hawaiian Electric's stock price [6]. Group 2: Stock Performance Metrics - Following the announcement, Hawaiian Electric's stock price rose by $1.22 to a current price of $12.46 [5]. - The market capitalization of Hawaiian Electric is reported at $2 billion, with a trading volume of 6.9 million shares on the day of the announcement [5][6]. - The stock's 52-week range is between $8.14 and $13.41, indicating a notable increase in value [6].

Financial Data and Key Metrics Changes - In Q3 2025, the company generated net income of $30.7 million or $0.18 per share, including $4.5 million for pre-tax Maui wildfire-related expenses [10] - Consolidated core net income was $32.8 million or $0.19 per share, compared to $32.7 million or $0.29 per share in Q3 2024 [10] - Utility core net income for the quarter was $39.6 million, down from $43.7 million in Q3 2024, driven by lower tax benefits and higher expenses [10][11] Business Line Data and Key Metrics Changes - The holding company reported a core net loss of $6.8 million, improved from a loss of $10.9 million in Q3 2024, due to lower interest expenses and higher interest income [11] - The company has approximately $40 million in unrestricted cash at the holding company and $504 million at the utility as of the end of Q3 [12] Market Data and Key Metrics Changes - The company completed a $500 million unsecured debt offering in September, enhancing liquidity and access to capital markets [12] - The board approved a $10 million quarterly dividend to HEI for Q3 2025 [13] Company Strategy and Development Direction - The company is focused on improving financial strength and resilience, implementing wildfire safety strategies, and advancing tort litigation settlements [4][5] - A proposal for an alternative non-rate case process to rebase rates was approved by the PUC, aiming to avoid the burdens of a formal rate case [5][6] - Capital expenditures (CapEx) are projected to increase significantly, with expectations of $400 million in 2025 and $550 million-$700 million in 2026, driven by wildfire safety and reliability projects [15][16] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress of the Maui wildfire tort litigation settlement and operational risk improvements since the 2023 wildfires [7][9] - The company anticipates that the first payment related to the settlement will be due no sooner than early 2026 [14] - Management is cautious about providing earnings guidance until after the final settlement approval process is completed [25] Other Important Information - The company is awaiting PUC approval for its utility wildfire safety strategy and has filed an application to increase costs for the Wai'a Repowering Project [15] - Approximately $1.8 billion-$2.4 billion in total CapEx is expected over the next three years, subject to additional PUC approvals [16] Q&A Session Summary Question: Revenue requirement and timing under the alternative rebasing filing - Management discussed the timing of the rebasing proposal due to the PUC on January 7, 2026, and the potential for a 2027 test year rate case if the proposal is unsuccessful [20][22] Question: Sustainable cadence of utility to hold co-dividends - The utility dividend to the holding company has been set based on the needs of the holding company, with no changes expected in the foreseeable future [23] Question: CapEx guidance and earnings guidance - Management indicated it is too soon to provide earnings guidance, as it will depend on the final settlement approval process and the outcomes of the rate rebasing [25][26] Question: Update on the sale of the remaining portion of the bank - The company intends to monetize its remaining stake in American Savings but has not committed to a specific timeline [32] Question: Expectations of the commission's report on the wildfire fund - The PUC is on track to submit a report to the Hawai'i State Legislature, but management is uncertain about potential legislative movements in 2026 [33][34]

Financial Data and Key Metrics Changes - In Q3 2025, the company generated net income of $30.7 million or $0.18 per share, which includes $4.5 million for pre-tax Maui wildfire-related expenses [10] - Consolidated core net income was $32.8 million or $0.19 per share, compared to $32.7 million or $0.29 per share in Q3 2024 [10] - Utility core net income for the quarter was $39.6 million, down from $43.7 million in Q3 2024, primarily due to lower tax benefits and higher expenses [10][11] Business Line Data and Key Metrics Changes - The holding company reported a core net loss of $6.8 million, improved from a loss of $10.9 million in Q3 2024, driven by lower interest expenses and higher interest income [11] - The company has approximately $40 million in unrestricted cash at the holding company and $504 million at the utility as of the end of Q3 [12] Market Data and Key Metrics Changes - The company completed a $500 million unsecured debt offering in September, enhancing liquidity and access to capital markets [12] - The board approved a $10 million quarterly dividend to HEI for Q3 2025 [13] Company Strategy and Development Direction - The company is focused on improving financial strength and resilience, implementing wildfire safety strategies, and preparing for a multi-year rate period under the performance-based regulation (PBR) framework [4][5] - Capital expenditures (CapEx) are projected to increase significantly, with expectations of $400 million in 2025 and $550 million to $700 million in 2026, aimed at reducing wildfire risk and increasing reliability [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress of the Maui wildfire tort litigation settlement and the implementation of safety measures [7][9] - The company is awaiting PUC approval for its wildfire safety strategy and is actively working on the rate rebasing process [15] Other Important Information - The company has $479 million held in a subsidiary for the first payment of the tort litigation settlement, expected no sooner than early 2026 [14] - Future CapEx is expected to total $1.8 billion to $2.4 billion from 2026 to 2028, subject to regulatory approvals [16] Q&A Session Summary Question: How should we think about the revenue requirement and timing under the alternative rebasing filing? - Management indicated that discussions with PBR parties are ongoing, with a proposal due to the PUC on January 7, 2026, and a potential test year rate case if the proposal is unsuccessful [20][22] Question: What is the sustainable cadence of utility to hold co-dividends through the settlement years? - The utility dividend to the holding company has been set based on the needs of the holding company, and this is not expected to change in the foreseeable future [23] Question: Can you provide an update on the sale of the remaining portion of the bank? - The company intends to monetize its remaining stake in American Savings but has not committed to a specific timeline [32] Question: What are the expectations of the commission's report on the wildfire fund? - The Public Utilities Commission is on track to submit a report to the Hawai'i State Legislature, but the content and implications for legislation in 2026 are uncertain [33][34]

Financial Data and Key Metrics Changes - In Q3 2025, the company generated net income of $30.7 million or $0.18 per share, which includes $4.5 million for pre-tax Maui wildfire-related expenses [11] - Consolidated core net income was $32.8 million or $0.19 per share, compared to $32.7 million or $0.29 per share in Q3 2024 [11] - Utility core net income decreased to $39.6 million from $43.7 million in Q3 2024, driven by lower tax benefits and higher expenses [11] Business Line Data and Key Metrics Changes - The holding company reported a core net loss of $6.8 million, improved from a loss of $10.9 million in Q3 2024, due to lower interest expenses and higher interest income [11] - The utility's operational risk profile has improved significantly since the 2023 Maui wildfires, with enhanced wildfire safety measures implemented [9] Market Data and Key Metrics Changes - As of the end of Q3 2025, the holding company had approximately $40 million and the utility had $504 million of unrestricted cash on hand [12] - The utility has approximately $544 million of liquidity available under its accounts receivable facility and credit facility capacity [13] Company Strategy and Development Direction - The company is focused on improving financial strength and resilience, implementing wildfire safety improvements, and preparing for a successful second multi-year rate period under the performance-based regulation framework [4][5] - Capital expenditures (CapEx) are projected to increase significantly, with expectations of $400 million in 2025 and $550 million to $700 million in 2026, aimed at reducing wildfire risk and increasing reliability [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing implementation of the Maui wildfire tort litigation settlement and the progress made in enhancing operational safety [10] - The company is awaiting PUC approval for its utility wildfire safety strategy and is working through the rate rebasing process [15] Other Important Information - The company completed a $500 million unsecured debt offering in September 2025, enhancing liquidity and access to capital markets [13] - The first payment related to the tort litigation settlement is expected no sooner than early 2026, with $479 million held in a subsidiary for this purpose [14] Q&A Session Summary Question: How should we think about the revenue requirement and timing under the alternative rebasing filing? - Management indicated that discussions with PBR parties are underway, with a proposal due to the PUC on January 7, 2026, and a potential test year rate case if the proposal is unsuccessful [18][19] Question: What is the sustainable cadence of utility to hold co-dividends through the settlement years? - Management stated that utility dividends to the holding company have been set based on the needs of the holding company and do not foresee changes in the near future [21] Question: How do you think about earnings guidance and EPS? - Management noted it is too soon to provide earnings guidance, as they want to wait until after the final settlement approval process [24]