Market Overview

Morgan Stanley: 6 Questions For PG&E After Utility's Bankruptcy Filing

Morgan Stanley: 6 Questions For PG&E After Utility's Bankruptcy Filing

With PG&E Corporation (NYSE: PCG) filing for bankruptcy Tuesday, Morgan Stanley outlined six major questions going foward about the California utility in a new research report.   

The Analyst

Analyst Stephen Byrd reiterated an Equal-Weight rating on PG&E with a $17.50 price target.

The Thesis

A high probability exists that the court will reject PG&E’s filing given that it may not comply with bankruptcy law that restricts solvent companies from strategic filings, Byrd said in a Tuesday note. 

“We believe there is a meaningful probability that a court would reject a PG&E Chapter 11 filing on the ground that the company is solvent and that PG&E is filing Chapter 11 to achieve tactical litigation advantages,” the analyst said. 

The answers to the following six questions will ultimately determine PG&E investors’ fate, Byrd said: 

  • Will the court reject the PG&E bankruptcy filing?
  • How will California legislators approach future wildfire liability?
  • Are there effective ways to reduce the risk of wildfire liability?
  • Could PG&E successfully separate its federal assets from its state-regulated assets to shield them from liability?
  • Will PG&E be held liable for the 2018 Camp Fire if the company’s behavior and handling of its equipment is not found to be negligent or imprudent?
  • Will the CPUC stress test continue now that PG&E has officially filed for bankruptcy?
  • Too many unknowns are in play for PG&E to predict where the stock is headed in the near-term, according to Morgan Stanley. 

Price Action

PG&E stock was up 13.16 percent at $13.59 at the time of publication, but is down 72.3 percent overall in the past three months.

Related Links:

PG&E Officially Files For Bankruptcy

Wall Street Reacts To The Latest PG&E Liability Ruling

Latest Ratings for PCG

Aug 2020MizuhoMaintainsBuy
Jul 2020Morgan StanleyMaintainsEqual-Weight
Jun 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for PCG
View the Latest Analyst Ratings


Related Articles (PCG)

View Comments and Join the Discussion!

Posted-In: Morgan Stanley Stephen ByrdAnalyst Color News Price Target Reiteration Legal Analyst Ratings Best of Benzinga

Latest Ratings

UBERRBC CapitalMaintains50.0
WIXJMP SecuritiesMaintains363.0
CVIJP MorganInitiates Coverage On22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at