Why EIX Sank Yesterday

British bank Barclays cut its price target on California-based electric utility owner Edison International (EIX) today. The change comes after the shares retreated 6.3% yesterday following the outbreak of a new fire in Los Angeles County. The additional blaze likely caused EIX stock to tumble in yesterday’s session.

A number of the customers of Edison’s subsidiary, Southern California Edison, have been affected by the California wildfires, and Edison has been held responsible for triggering other wildfires in the past.

Barclays Slashed Its Target on EIX

The bank cut its price target on EIX to $67 from $76, but it kept an Overweight rating on the name. Barclays believes that Edison will probably not have to pay more than about $4 billion as a consequence of the wildfires, even if it is found to be liable for the natural disaster. That’s because a California law called AB 1054 will likely put a ceiling on Edison’s exposure, according to Barclays.

A New Fire Broke Out in Los Angeles County

An additional, fast-moving blaze began in Los Angeles County yesterday. As a result of the new fire, which started 45 miles northwest of the city of Los Angeles, tens of thousands of residents of the area were forced to leave their homes.

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Disclosure: None. This article is originally published at Insider Monkey.