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Investing.com - UBS has reduced its price target on PG&E Corporation (NYSE:PCG) to $17.00 from $19.00 while maintaining a Neutral rating on the stock.
The investment firm cited concerns about a delay in establishing a permanent wildfire fund solution, which is now pushed to next year, along with affordability issues in California. UBS noted that PG&E remains "a top crowded long in Utilities" according to their "Weekly Crowding Data."
UBS views the recent passage of SB 254 as "a net positive but not necessarily a permanent fix due to the size of the fund." The legislation includes a $6 billion securitization funding for non-earning utility investments in California, with a report to the state legislature on next steps from wildfire fund administrators due April 1, 2026.
The firm has applied a 5% discount to PG&E, similar to discounts assigned to other companies with negative pricing power, including Edison International, Eversource Energy, and Exelon Corporation.
UBS indicated that its view on PG&E could improve with reasonable outcomes in the cost of capital proceeding or progress in 2026 on a permanent solution to wildfire liability reform.
In other recent news, PG&E Corporation reported its financial results for the second quarter of 2025, which fell short of analysts’ expectations. The company announced earnings per share of $0.31, missing the forecasted $0.34, and revenue of $5.9 billion, below the anticipated $6.26 billion. These earnings results highlight the challenges PG&E faces in meeting market expectations. In a related development, California lawmakers reached an initial agreement to boost the state’s wildfire utility fund by approximately $18 billion, which could impact PG&E’s financial landscape. The agreement aims to replenish the fund following recent wildfires, with funding split between ratepayers and utility shareholders.
Morgan Stanley upgraded PG&E’s stock from Underweight to Equalweight, raising its price target to $20.00, citing an improved risk profile. Meanwhile, UBS maintained its Neutral rating and $19.00 price target, noting evolving wildfire legislation in California. UBS also reiterated its Neutral rating following a California Public Utility Commission decision to increase PG&E’s capital cost caps by $1.47 billion. These developments reflect ongoing assessments by analysts of PG&E’s financial and regulatory environment.
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