Hawaiian Electric Industries (HE) is back in focus after finalizing the global Maui wildfire settlement and making the first of four annual payments, alongside first quarter earnings and a credit rating upgrade from Moody's.

There has been a sharp reset in sentiment, with the share price down 11.2% over the past 90 days but still up 17.4% year to date. The 1 year total shareholder return of 38.7% contrasts with a much weaker 3 and 5 year total shareholder performance. This suggests that momentum has recently improved but from a lower long term base as the wildfire settlement, credit upgrade and Q1 earnings reshape how investors think about Hawaiian Electric Industries’ risk profile.

If this kind of reset in risk and return has you reassessing your watchlist, it can help to look at companies exposed to similar infrastructure themes and grid spending, including 36 power grid technology and infrastructure stocks

With the settlement, credit upgrade and Q1 numbers now on the table, the key question is whether Hawaiian Electric Industries at about $14.83 is still trading below its fundamentals or if the recent rebound already reflects future growth.

Most Popular Narrative: 7.9% Overvalued

With Hawaiian Electric Industries last closing at $14.83 against a narrative fair value of $13.75, the current price sits above that widely followed estimate, which leans on a detailed set of revenue, earnings and risk assumptions.

Legislative and regulatory actions reduce legal risk, support infrastructure upgrades, and improve financial stability and earnings potential. Refocus on core utility business and clean energy investments positions the company for long-term growth and enhanced revenue opportunities.

Curious what earnings path and margin rebuild this story is banking on. The narrative leans heavily on one earnings level and one future profit multiple. The gap between them is where the fair value math really lives.

Result: Fair Value of $13.75 (OVERVALUED)

However, there is still the risk that higher wildfire mitigation and insurance costs, or additional litigation, could pressure margins and challenge the earnings path underpinning that fair value.

Another View: Multiples Paint a Different Picture

Analysts see Hawaiian Electric Industries as about 7.9% overvalued against a $13.75 fair value, yet the current P/E of 20.2x sits below the Electric Utilities industry at 21.3x, peers at 25.2x, and even the 22.6x fair ratio. That discount hints at valuation risk running both ways. The key question is which signal you put more weight on.

Next Steps

Given the mix of concern and optimism running through this story, now is a good time to examine the data yourself and promptly form your own view using 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.