Wells Fargo upgraded Hawaiian Electric Industries (NYSE:HE) to Equal Weight from Underweight on Friday, lowering the stock price target to $8 from $25 per share.
Wells Fargo analysts told investors in a note that despite the upgrade, more downside risk remains.
"Credible media reports and capital markets fallout seems to have Hawaiian Electric backed into a corner," they wrote. "Assuming $0/sh for utility now seems prudent to us."
"HE shares have been under considerable pressure since 8/10 (-68% vs. S&P Utilities -3%) as the fallout from devastating HI wildfires started to crystalize over the weekend," they added. "While the causes of the fires are still under investigation (no timeframe for determination), the prospects of HE avoiding liability appears highly unlikely, in our view."
The analysts also noted other headwinds, such as lawsuits against the utility, S&P's debt downgrade to junk, and a WSJ report that Hawaiian Electric is in talks with financial restructuring firms.