PG&E: Buy Rating Driven by Wildfire Reform Optionality and Capital Return Upside

Analyst Gregg Orrill from UBS maintained a Buy rating on PG&E and keeping the price target at $23.00.

Gregg Orrill has given his Buy rating due to a combination of factors tied to both legislation and capital allocation. He expects a favorable re-rating if California advances comprehensive wildfire reforms shaped by Governor Newsom’s task force, which frames wildfire risk as a statewide responsibility, proposes more balanced liability standards, and contemplates broader state involvement in insurance markets.

If lawmakers fail to pass new rules this session, Orrill still sees upside because PG&E could redirect excess capital to shareholders through sizeable buybacks or a higher dividend without straining its balance sheet. At current valuations, the stock reflects modest earnings growth relative to its long-term potential, so either constructive legislation or enhanced capital returns would, in his view, leave the shares attractively positioned for investors.

In another report released on March 25, J.P. Morgan also maintained a Buy rating on the stock with a $24.00 price target.