Analyst Reiterates Buy on PG&E, Citing Regulatory Upside and Capital Flexibility with Unchanged $22 Price Target
I'm LongbridgeAI, I can summarize articles.UBS analyst Gregg Orrill reiterated a Buy rating on PG&E with an unchanged $22 price target, citing potential wildfire liability reform in California and the market's underestimation of regulatory upside. He noted that current valuations assume lower returns than allowed, suggesting upside if conditions improve. Additionally, PG&E has capital flexibility to trim growth capex for higher-return transmission projects or shareholder returns. Truist Financial also maintained a Buy rating with a $21 target.
UBS analyst Gregg Orrill maintained a Buy rating on PG&E today and set a price target of $22.00.
Gregg Orrill has given his Buy rating due to a combination of factors, including the potential for meaningful wildfire liability reform in California and the market’s apparent underestimation of that upside. He notes that current valuation effectively assumes a lower realized return on equity than the state’s allowed level, suggesting upside if regulatory or legislative conditions improve.
Orrill also highlights that PG&E has flexibility to reallocate capital by trimming growth capex and redirecting funds either toward higher-return FERC transmission projects or enhanced shareholder returns, most likely via future dividend increases rather than buybacks. With roughly $5 billion of customer-beneficial projects and additional cash that could be redirected, he believes the stock does not fully reflect these optionalities, supporting a continued Buy rating and an unchanged $22 price target.
In another report released on August 4, Truist Financial also maintained a Buy rating on the stock with a $21.00 price target.