In a report released today, David Arcaro from Morgan Stanley maintained a Hold rating on PG&E, with a price target of $19.50.
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David Arcaro has given his Hold rating due to a combination of factors surrounding PG&E’s financial outlook and strategic initiatives. The company has demonstrated a strong projected earnings growth rate through 2030, with an extended EPS growth rate of over 9%. This positions PG&E favorably compared to its utility peers. However, despite this positive growth outlook, the stock is currently trading at a significant discount relative to its peers, which suggests that market concerns, particularly around wildfire legislation and the potential for utility-caused fires, may be impacting investor sentiment.
Additionally, PG&E’s financial plan highlights a focus on maintaining balance sheet strength and prioritizing investment in safety and resiliency, with a potential for opportunistic share buybacks if the stock remains undervalued. While these strategies indicate a solid approach to capital allocation, the uncertainty surrounding regulatory risks and the need to navigate through fire seasons without major incidents are key factors that contribute to the Hold rating. These elements suggest a cautious optimism, balancing the company’s growth potential with the risks inherent in its operating environment.
In another report released on September 27, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $16.00 price target.