Market Overview

PG&E Analyst Sees Buying Opportunity In Bankrupt California Utility's Shares

PG&E Analyst Sees Buying Opportunity In Bankrupt California Utility's Shares

Shares of PG&E Corporation (NYSE: PCG) are trading at just the right price, between the utility's rights offering and the equity backstop, which creates a “significant opportunity” for shareholders, according to Mizuho Securities.

The PG&E Analyst

Paul Fremont maintained a Buy rating on PG&E and raised the price target from $12.50 to $13.50.

The PG&E Thesis

The two scenarios — the rights offering and the equity backstop — have a share count difference of 400 million, which equates to a 25-cent-per-share difference in Mizuho’s earnings estimate for 2022, Fremont said in a Wednesday note. 

“Whether valuing on our base-case backstop equity assumption or on a higher rights-offering earnings level, we continue to see significant upside in PG&E valuation,” the analyst said. 

The base-case assumption translates to an earnings estimate for 2022 of $1.04 per share, meaning that the shares are trading at a 30% discount, he said.

The rights offering leads to an estimate of $1.30 per share, suggesting that the stock is trading at a 45% discount, Fremont said. 

PG&E Corp seems to be on track to emerge from bankruptcy on or before June 30, the analyst said, adding that the next key milestone will be the outcome of voting on the company’s reorganization plan.

PG&E filed a request to securitize $7.5 billion of wildfire costs with the CPUC on April 30, according to Mizuho. 

PCG Price Action

Shares of PG&E were down 2.54% at $11.51 at the time of publication Wednesday. 

Related Links:

PG&E Analyst Upgrades Stocks As Utility Positions To Emerge From Bankruptcy

Recap: PG&E Q1 Earnings

Photo by Hydrogen Iodide via Wikimedia

Latest Ratings for PCG

Jun 2020Morgan StanleyMaintainsEqual-Weight
Jun 2020Seaport GlobalInitiates Coverage OnNeutral
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: Mizuho Securities Paul FremontAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

HSTRBC CapitalMaintains12.0
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