Hawaii‘s Rate Reset: The Process Is Approved, the Dollars Are Not; 2Q26 Preview

Research evidence excerpt

Hawaii‘s Rate Reset: The Process Is Approved, the Dollars Are Not; 2Q26 Preview

NORTH AMERICA | Power & Utilities

Hawaiian Electric Industries EquityJulyResearch6, 2026

TARGET | ESTIMATE CHANGEHawaii's Rate Reset: The Process Is Approved,

RATING UNDERPERFORMthe Dollars Are Not; 2Q26 Preview

PRICE $13.63^

Hawaii approved the process for resetting the utility's revenues, but not the

amount. That decision is expected in mid to late April 2027. Only about half PRICE TARGET | % TO PT $11.75 ($13.75) | -14%

of the $170m request adds to earnings, so a $125m outcome can earn the 52W HIGH-LOW $17.38 - $10.45

same as the full ask. Three $479m settlement payments remain unfunded, and FLOAT (%) | ADV MM (USD) 96.2% | 24.46

the financing absorbs much of the recovery. Shares trade at 12.5x consensus MARKET CAP $2.4B

2028E EPS of $1.09. We stay UNDERPERFORM, $11.75 target. TICKER HE ^Prior trading day's closing price unless otherwise

noted.

HE is a post-wildfire recovery story, and the market has paid for the recovery before the open

questions are resolved; we stay UNDERPERFORM with an $11.75 target. The Maui settlement

FY (Dec) CHANGE TO JEFe JEF vs CONS

is final, and the first $479m payment went out in April. Two key questions still set the value: the

2026 2027 2026 2027

size of the revenue reset and the funding of the remaining payments. The company remains below

investment grade and pays no dividend. EPS NM NA +6% -1%

NA NA NA NA

The June order approved how revenues get reset, but not by how much. The dollar decision is

expected in mid to late April 2027. Hawaii replaced rate cases with an index formula in 2020. Five

years of formula revenues missed actual inflation and a six-fold rise in insurance premiums. The

utilities asked for a $170m increase phased over 2027 and 2028.