What is the potential impact of the all‑party settlement on AVA's regulatory risk profile compared to its peers in the utility sector?

Regulatory‑risk outlook:

The Idaho‑wide, all‑party, all‑issues settlement removes any lingering litigation or rate‑case uncertainty for Avista (AVA). By locking in the new rates for 2025‑26, the company now has a clear, regulator‑approved earnings runway for the next two fiscal years. Compared with peers such as PNW Utilities, Evergy or Xcel, which are still wrestling with pending rate petitions or litigation, AVA’s risk‑profile is materially tighter. The settlement eliminates the “regulatory surprise” premium that often depresses peer multiples, allowing AVA to trade closer to its intrinsic utility valuation rather than a risk‑discounted spread.

Trading implications:

1. Fundamentals: With the rate base fixed, Avista’s cash‑flow forecast becomes more deterministic, supporting its dividend sustainability and giving it room to fund modest cap‑ex without upside rate‑recovery pressure. Relative‑EV/EBITDA and dividend‑yield spreads to the utility index should compress, making AVA slightly more attractive on a risk‑adjusted basis.

2. Technical: The stock has been consolidating near the 50‑day MA (≈ $78) since the settlement news. A breakout above the recent high (~$81) with volume could signal the market pricing in the lowered regulatory risk. Conversely, a drop below the 20‑day MA (~$74) would suggest investors are still demanding a risk premium.

3. Actionable stance: In a sector that is otherwise rate‑case‑heavy, position AVA as a “low‑regulatory‑risk” utility relative to its peers. Consider buying on dips near the 20‑day MA with a target of the prior resistance at $81‑$83, which would represent a ~5‑7% upside and an improved risk‑reward profile. Keep a stop just below the 20‑day MA to protect against any broader utility‑sector stress.