Wells Fargo upgrades Hawaiian Electric to Equal Weight after selloff

Wells Fargo upgraded Hawaiian Electric to Equal Weight from Underweight with a price target of $8, down from $25. The stock has been under considerable pressure since the Maui wildfires as well as lawsuits against the utility, S&P’s debt downgrade to junk, media reports linking the company’s equipment to potential fire ignitions, and a Wall Street Journal report that Hawaiian Electric is in talks with financial restructuring firms, the analyst tells investors in a research note. The firm believes the company is “backed into a corner” and finds it prudent to assume $0 per share value for its utility operations. However, Wells thinks the stock’s probability-weighted risk/reward is “far more balanced” at current levels. The firm, which says the prospects of Hawaiian Electric avoiding liability “appears highly unlikely,” notes its price target reflects the value of the company’s bank unit only.