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PG&E (PCG)
NYSE:PCG
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PG&E
(NYSE:PCG)
Rating:68Neutral
Price Target:
$18.50
▲( 8.70% Upside)
Positive Factors
Data Center Growth
PCG's data center campaign is ramping up quickly, with significant projects in advanced stages and expected to reduce legacy customer electric bills.
Investment Outlook
PCG's investment outlook includes a strong 9% EPS growth and no requirement for additional equity funding until 2028.
Legislative Outcomes
Management expects a constructive legislative outcome on wildfire risk this year.
Negative Factors
Cost of Capital
Interest rates are up, and the actual cost of capital is higher.
Legislative Challenges
State policy is critical in ensuring the financial health of California's investor-owned utilities, but legislative changes will be a prolonged process with the lengthy California 2025 legislative session ending in September.
Wildfire Insurance Fund Concerns
The potential depletion of the California wildfire insurance fund due to the Eaton fire is a concern.
PG&E (PCG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$37.40B
Dividend Yield0.4%
Average Volume (3M)14.44M
Price to Earnings (P/E)15.7
Beta (1Y)0.37
Revenue Growth1.91%
EPS Growth-4.40%
CountryUS
Employees28,410
SectorUtilities
Sector Strength82
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.33
Shares Outstanding2,197,685,000
10 Day Avg. Volume11,845,839
30 Day Avg. Volume14,444,834
Financial Highlights & Ratios
PEG Ratio-2.99
Price to Book (P/B)1.04
Price to Sales (P/S)0.00
P/FCF Ratio5.17
Enterprise Value/Market Cap2.61
Enterprise Value/Revenue0.99
Enterprise Value/Gross Profit10.58
Enterprise Value/Ebitda2.56
Forecast
1Y Price Target
$20.50Price Target Upside20.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
PG&E Business Overview & Revenue Model
Company DescriptionPacific Gas and Electric Company (PG&E), a subsidiary of PG&E Corporation, operates as a public utility company in the United States. It primarily provides natural gas and electricity to residential, commercial, and industrial customers across Northern and Central California. The company engages in the generation, transmission, and distribution of electricity as well as the procurement, transportation, and storage of natural gas.
How the Company Makes MoneyPG&E makes money primarily through the sale and distribution of electricity and natural gas to its customer base, which includes residential, commercial, industrial, and agricultural users. Revenue is generated from customer payments for energy consumption, where rates are regulated by the California Public Utilities Commission (CPUC) to ensure fair pricing. PG&E also earns revenue from infrastructure investments and maintenance, which are incorporated into customer rates. Additionally, the company benefits from various state and federal incentives related to renewable energy and energy efficiency programs, which can enhance its revenue streams. Key factors influencing PG&E's earnings include regulatory decisions, energy market conditions, and the company's ability to manage operational expenses and capital expenditures effectively.
PG&E Financial Statement Overview
Summary
PG&E has demonstrated strong financial performance in the TTM period, with improved profitability, efficient leverage management, and impressive cash flow generation. While revenue growth remains steady, the company benefits from strong operational margins and a solid capital structure. The improvements in free cash flow and reduced debt levels mark a positive trajectory for future financial stability.Income Statement
PG&E shows a solid gross profit margin in the TTM (Trailing-Twelve-Months) at approximately 37.6%, indicating effective cost management. The net profit margin has improved to 9.8% compared to previous years, reflecting enhanced profitability despite past volatility. Revenue growth has been moderate, with a slight increase in TTM compared to the previous year. The EBIT and EBITDA margins are robust at 17.9% and 33.2%, respectively, demonstrating strong operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio has decreased significantly to 0.72 in TTM, indicating improved leverage management. However, the return on equity remains moderate at 6.7%, suggesting room for more efficient equity utilization. A strong equity ratio of 36.5% in TTM shows a solid capital structure relative to total assets.65
Positive
Cash Flow
PG&E has shown a remarkable turnaround in free cash flow, shifting from negative figures to a strong positive in the TTM, with a free cash flow growth rate of 411.7% from the previous year. The operating cash flow to net income ratio is 3.3, suggesting healthy cash generation relative to earnings. The free cash flow to net income ratio is 3.0, indicating that the company is effectively converting earnings into free cash flow.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 24.54B | 24.42B | 24.43B | 21.68B | 20.64B | 18.47B | Gross Profit |
| 9.22B | 9.16B | 8.31B | 7.01B | 6.06B | 5.89B | EBIT |
| 4.40B | 4.46B | 2.67B | 2.63B | 2.62B | 2.53B | EBITDA |
| 9.70B | 9.94B | 7.19B | 7.07B | 6.57B | 4.20B | Net Income Common Stockholders |
| 2.41B | 2.51B | 2.26B | 1.81B | -88.00M | -1.30B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.02B | 940.00M | 635.00M | 734.00M | 165.00M | 484.00M | Total Assets |
| 135.44B | 144.62B | 125.70B | 118.64B | 103.18B | 97.86B | Total Debt |
| 59.97B | 58.34B | 57.73B | 53.54B | 41.55B | 42.60B | Net Debt |
| 57.95B | 57.40B | 57.10B | 52.80B | 41.38B | 42.12B | Total Liabilities |
| 104.51B | 103.26B | 100.41B | 95.57B | 77.57B | 76.60B | Stockholders Equity |
| 36.12B | 30.15B | 25.04B | 22.82B | 25.61B | 21.00B |
| Cash Flow | Free Cash Flow | ||||
| 7.28B | -2.33B | -4.97B | -5.86B | -5.24B | -26.74B | Operating Cash Flow |
| 7.96B | 8.04B | 4.75B | 3.72B | 2.45B | -19.05B | Investing Cash Flow |
| -12.22B | -11.38B | -9.16B | -10.21B | -7.05B | -7.75B | Financing Cash Flow |
| 4.47B | 3.62B | 4.40B | 7.13B | 4.38B | 26.07B |
PG&E Technical Analysis
Negative
17.02
Price Trends
17.06
Negative
16.86
Positive
18.37
Negative
Market Momentum
0.13
Negative
47.14
Neutral
54.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCG, the sentiment is Negative. The current price of 17.02 is below the 20-day moving average (MA) of 17.18, below the 50-day MA of 17.06, and below the 200-day MA of 18.37, indicating a bearish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 47.14 is Neutral, neither overbought nor oversold. The STOCH value of 54.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCG.
PG&E Risk Analysis
PG&E disclosed 32 risk factors in its most recent earnings report. PG&E reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Jurisdictions may attempt to acquire the Utility's assets through eminent domain. Q3, 2022
2.
PG&E Corporation and the Utility could be liable for a failure to comply with privacy laws. Q3, 2022
3.
Inflation may negatively impact PG&E Corporation's and the Utility's financial conditions, results of operations, liquidity, and cash flows. Q3, 2022
PG&E Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $34.33B | 21.00 | 12.96% | 3.19% | 4.42% | 11.98% | |
73 Outperform | $36.33B | 27.36 | 8.96% | 2.82% | -0.84% | -37.59% | |
68 Neutral | $37.40B | 15.65 | 8.55% | 0.40% | 1.91% | -4.40% | |
66 Neutral | $41.71B | 21.32 | 10.26% | 3.16% | -0.44% | 2.14% | |
65 Neutral | $39.61B | 21.70 | 11.40% | 3.12% | 11.24% | 1.15% | |
63 Neutral | $8.47B | 10.31 | 4.67% | 4.37% | 4.05% | -12.96% | |
61 Neutral | $37.26B | 19.09 | 8.33% | 3.17% | 8.52% | 3.91% |
* Utilities Sector Average
Performance Comparison
PCG
PG&E
17.02
-1.37
-7.45%
ED
Consolidated Edison
103.42
12.16
13.32%
ETR
Entergy
81.28
28.06
52.72%
PEG
Public Service Enterprise
77.37
4.58
6.29%
WEC
WEC Energy Group
106.78
28.88
37.07%
XEL
Xcel Energy
69.21
17.35
33.46%
PG&E Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: -2.96%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlights PG&E's significant progress in growth initiatives, safety improvements, and financial stability, as evidenced by reaffirmed guidance and credit rating upgrades. However, challenges remain with lower core earnings, legislative uncertainties regarding wildfire liabilities, and ongoing tariff impacts.Q1-2025 Updates
Positive Updates
Reaffirmation of 2025 Full-Year Guidance
PG&E reaffirmed its full-year guidance range of $1.48 to $1.52 for 2025, with a midpoint 10% increase from 2024 results.
Data Center Load Growth
The data center project pipeline increased from 5.5 gigawatts to 8.7 gigawatts, indicating strong potential for future growth.
Improved Safety Record
PG&E has gone 814 days without a fatality, the longest period in over 25 years, highlighting improvements in safety culture.
Capital Investment Plan
PG&E's 5-year $63 billion capital plan remains on track, with no single project accounting for more than 2% of the overall plan.
Moody's Upgrade
In March, Moody's upgraded PG&E's utility issuer credit rating to investment grade, acknowledging progress in financial stability.
O&M Cost Reductions
PG&E saved over $500 million in 2023 and another nearly $350 million in 2024 through O&M cost reductions.
Negative Updates
Lower Core Earnings in Q1 2025
Core earnings per share were $0.33, $0.04 lower than the same quarter in 2024, primarily due to lower ROE and equity dilution.
Wildfire Risk and Legislative Uncertainty
Ongoing concerns about wildfire risks and the need for legislative solutions to address funding and liability issues under AB 1054.
Tariff Exposure
Approximately $100 million of PG&E's total spend is impacted by tariffs, particularly in computer hardware and electric equipment.
Company Guidance
In PG&E's First Quarter 2025 earnings call, CEO Patty Poppe highlighted a core earnings per share of $0.33 and reaffirmed the 2025 full-year guidance range of $1.48 to $1.52, representing a 10% increase from 2024. The company maintains a 9% annual EPS growth outlook for 2026-2028. PG&E is committed to a $63 billion capital investment plan through 2028, with affordability as a key focus, noting that customer bills have decreased in 2025 compared to 2024, with further reductions anticipated in 2026. The company also emphasized progress in wildfire risk mitigation and infrastructure improvements, including a data center load growth pipeline that has expanded from 5.5 gigawatts to 8.7 gigawatts. PG&E expects constructive legislative outcomes regarding AB 1054 to enhance long-term affordability and ensure access to low-cost capital. Additionally, CFO Carolyn Burke noted the utility's strong performance with a $0.04 decrease in Q1 earnings compared to the previous year, attributed to the reduction in the authorized return on equity and equity dilution. The company continues to execute its five-year capital plan and aims to achieve investment-grade credit ratings while managing costs through its lean operating system.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.