Hawaiian Electric Industries (HE) has been added to the Russell 2000 Defensive Index and the Russell 2000 Value-Defensive Index, a change that may influence how some institutional investors view the stock.
See our latest analysis for Hawaiian Electric Industries.
At a share price of $13.41, Hawaiian Electric Industries has seen its 1-month share price return of 1.82% offset by a 90-day share price decline of 12.35%. The 1-year total shareholder return of 24.17% contrasts with much weaker 3 and 5-year total shareholder returns, indicating that recent momentum follows a much tougher longer-term period for investors.
If this kind of index related move has your attention, it could be a good moment to broaden your watchlist with 35 power grid technology and infrastructure stocks
With Hawaiian Electric Industries trading close to its analyst price target and recent returns mixed across different time frames, the key question is whether the stock still offers value or if the market is already pricing in future growth.
Most Popular Narrative: 2.5% Undervalued
At $13.41 a share versus a fair value narrative of $13.75, Hawaiian Electric Industries is priced very close to that assessment, so the detail behind the forecast matters.
Recent Hawaii legislation enabling wildfire liability caps, state funding for settlements, and securitization of wildfire safety investments significantly reduces legal and financial risk exposure while supporting large-scale infrastructure upgrades, which is likely to stabilize earnings and improve net margins.
Curious what kind of revenue path, profit margins, and future earnings multiple underpin that fair value? The story blends moderate growth, changing risk assumptions, and a reset on profitability expectations.
Result: Fair Value of $13.75 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Hawaiian Electric Industries still faces wildfire related litigation and higher mitigation and insurance costs, which could pressure margins and weaken the current valuation case.
Find out about the key risks to this Hawaiian Electric Industries narrative.
Another View: Hawaiian Electric Industries Through A Cash Flow Lens
While the analyst narrative pegs Hawaiian Electric Industries at a fair value of $13.75 with a 2.5% undervaluation, the SWS DCF model points in the opposite direction. On this measure, HE at $13.41 is trading well above an estimated future cash flow value of $3.72. This frames the stock as expensive rather than cheap and raises a simple question: which story do you trust more, earnings or cash flows?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hawaiian Electric Industries for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 41 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
The mixed signals around Hawaiian Electric Industries, with both risks and rewards in play, make this a moment to act quickly and review the details for yourself, then weigh the 4 key rewards and 1 important warning sign
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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