HE

Hawaiian Electric is now a pure-play regulated electric monopoly after selling 90.1% of American Savings Bank on Dec 31, 2024, and the FY2025 numbers show a real operating recovery: net income swung from a -$1.42B wildfire-driven loss in FY2024 to +$126M, operating income more than doubled to $235M, and diluted EPS reached $0.71. A regulated utility on Oahu/Hawaii/Maui with PUC cost-recovery mechanisms (including a 98%/2% fuel-cost risk-sharing split that pushes nearly all commodity risk to ratepayers) is a defensible, cash-generative franchise — $391M operating cash flow against $341M capex.

But the forward picture is dominated by the Maui windstorm and wildfires. The MD&A states management is still 'work[ing] on strategic financing plans to raise capital necessary to fund the settlement of wildfire tort claims,' with the first liability installment parked in GLST1 and Hawaiian Electric having issued $500M of 6.00% senior notes and expanded revolvers in late 2025 to shore up liquidity. The size of the equity dilution required to fund the settlement is not in the provided data, yet the current 173M share count and 19.1x P/E do not appear to reflect it. The balance sheet is already stretched — liabilities/equity of 4.56x, a -$666M accumulated deficit, and cash down 33% to $502M — so the buffer for absorbing settlement payments is thin.