Goldman Sachs Lowers Pacific Gas & Electric (PCG) Price Target
March 01, 2010 9:47 AM
Goldman Sachs analysts Michael Lapides, Jaideep Malik, Zac Hurst, and Neil Mehta maintained their Neutral rating for shares of Pacific Gas & Electric Co. (NYSE: PCG) and lowered their price target from $47 to $46.
The primary risks facing Pacific Gas & Electric Co. included the possibility of lower than expected rate base growth, regulatory risks, and higher than expected financing costs.
The analysts noted that Pacific Gas & Electric's 4th quarter 2009 earnings release lowered expected rate base guidance for 2010 from just over $22 billion down to $21.4 billion.
The analysts wrote that, "after 4Q2009 and before PCG’s analyst day on March 1, we slightly lower estimates to reflect (1) decreased rate base assumption for 2010, (2) modestly lower rate base growth from core distribution capital spending, and (3) slightly higher financing requirements through 2012. We lower our 12-month price target for PCG from $47 to $46, implying 14% total return for this large-cap Regulated Utility."
