Shares of Hawaiian Electric tumbled more than 35% on Monday amid Wall Street concerns about the company's potential liability in the Maui wildfires.
On Saturday, a class-action lawsuit was filed against the utility company, which oversees Maui Electric, that alleged the destruction "could have been avoided" if the company shut down its power lines before the high winds hit.
At least 96 people have died in what is now the deadliest U.S. wildfire in more than a century.
Wells Fargo subsequently lowered its price target on the stock to $25 per share from $35 on Sunday. The firm maintained its underweight rating.
"While it remains unclear if any of HE's equipment directly caused any of the wildfires, we believe it prudent to account for the risk given recent wildfire-related claims in CA, CO & OR that have all exceeded $1B, HE is already being scrutinized and our understanding of HI's liability standards," analyst Jonathan Reeder wrote in a note to clients.
He believes Hawaiian Electric's liability standard "revolves around a reasonableness of care when determining negligence, a lower burden for plaintiffs to prove than say a gross negligence standard."
The cause of the wildfires are still under investigation. Hawaiian Electric spokesperson Jim Kelly told NBC News the company doesn't comment on pending litigation, saying its immediate focus is supporting emergency response efforts and restoring power.
"At this early stage, the cause of the fire has not been determined and we will work with the state and county as they conduct their review," he said in a statement.
The company was aware that shutting power down is an effective strategy but didn't adopt it as part of its fire mitigation plans, the Washington Post reported Saturday, citing documents, Hawaiian Electric and two former power and energy officials.
With Monday's decline, the shares are down 44% in August.