UBS analyst Gregg Orrill downgraded the rating on PG&E (PCG – Research Report) to a Hold yesterday, setting a price target of $19.00.
Gregg Orrill has given his Hold rating due to a combination of factors impacting PG&E’s stock. One major concern is the potential depletion of the California wildfire insurance fund, exacerbated by the Eaton fire, which introduces significant volatility related to wildfires. Additionally, there is a lack of clear catalysts that could lead to a positive revaluation of the stock, which has led to a more cautious outlook.
Despite these challenges, PG&E does have some positive attributes, such as a strong 9% EPS growth forecast and no need for additional equity funding until 2028. The company’s recent track record in wildfire mitigation is also commendable. However, the absence of new legislation to reduce risks and the upcoming rate case and cost of capital proceedings in 2Q’25 present potential risks. As a result, the risk and reward balance for PG&E’s stock is viewed as more even at this time, justifying the Hold rating.
Based on the recent corporate insider activity of 57 insiders, corporate insider sentiment is neutral on the stock.