NEW YORK (AP) -- A pair of analyst cut their price targets for Edison International, pointing to its plans to permanently shut down two units at a nuclear facility sooner than they expected.
THE BACKGROUND: The Rosemead, Calif.-based company's Southern California Edison subsidiary on Friday decided to close its San Onofre nuclear power plant permanently.
The decision brought to a sudden end a dispute that began in January 2012, when a small radiation leak led to a shutdown and the discovery of unusual damage to hundreds of tubes that carry radioactive water in the plant's virtually new steam generators.
The facility never produced electricity again.
Edison was facing a tangle of investigations and regulatory hurdles, along with political pressure. The company suffered a major blow last month when regulators rejected Edison's arguments to restart the plant. That left the company facing months of possible appeals and motions, with no certainty a restart would occur.
The San Onofre reactors — situated along the Pacific Coast between San Diego and Los Angeles — are the largest to shut down permanently in the U.S. in the past 50 years, federal officials said.
THE OPINIONS: Citi analyst Shahriar Pourreza backed his "Buy" rating for Edison International, but cut his price target by $3 to $58, said the move removes some of the uncertainty surrounding the company. He said that the ongoing costs related to keeping the units ready for a possible restart probably prompted the decision.
BMO Capital Markets analyst Michael Worms also pointed to the escalating costs as the reason for the permanent closure. He backed his "Market Perform" rating and cut his price target by $6 to $50.
THE SHARES: Down 56 cents to $47.05 in afternoon trading. Its shares have traded in a 52-week range of $42.57 to $54.19.
- Utility Industry
- Investment & Company Information
- Edison International
- Southern California Edison
- San Onofre nuclear power plant