Market Overview

PG&E Continues Fall After Credit Rating Cut To Junk Status

Share:
PG&E Continues Fall After Credit Rating Cut To Junk Status
Related PCG
Benzinga's Top Upgrades, Downgrades For January 15, 2019
24 Stocks Moving In Tuesday's Pre-Market Session
Historic Vote For Brexit Future (Wall Street Breakfast Podcast) (Seeking Alpha)

Things went from bad to worse Tuesday for PG&E Corporation (NYSE: PCG) and its investors after a credit rating downgrade sent shares tumbling for the second straight day.

After Monday's close, S&P Global cut PG&E Corp’s credit rating from BBB- to B, a move that drops the company’s debt from investment grade to “highly speculative” non-investment grade, or “junk” status.

S&P said PG&E could be subject to further credit downgrades in coming weeks “if management does not clearly articulate specific steps it will take to preserve credit quality over the long term.”

Hardly A Surprise

The rating cut wasn’t particularly surprising after a pair of troubling reports sent PG&E shares plummeting more than 20 percent Monday. CNBC reported the company could face a minimum of $30 billion in liabilities related to California wildfires in 2017 and 2018, citing unnamed sources. The CNBC report followed a Reuters story over the weekend suggesting the utility is considering a bankruptcy filing and will potentially be taking a major financial charge in Q4.

In June, California found PG&E equipment was responsible for starting dozens of fires throughout the state in 2017. The state is now investigating whether PG&E equipment was responsible for starting 2018’s Camp Fire, the most destructive wildfire in California history.

A potential $30 billion in liability for PG&E would far outpace its market cap of $8.8 billion.

On Monday, Height Capital Markets analyst Clayton Allen predicted a potential rating cut to junk status.

“We argue bankruptcy may be a substantive solution for several of PCG’s woes, and should be considered a credible risk by shareholders,” Allen said.

Following Tuesday’s 10-percent drop, PG&E stock is now down 65 percent overall in the past three months.

Related Links:

PG&E Stock Slammed Following Reports Of Massive Wildfire Liability, Potential Bankruptcy

Morgan Stanley Updates Outlook For PG&E After Mixed Wildfire Developments

Latest Ratings for PCG

DateFirmActionFromTo
Jan 2019ArgusDowngradesBuySell
Jan 2019MacquarieDowngradesOutperformNeutral
Jan 2019Bank of AmericaTerminatesBuyBuy

View More Analyst Ratings for PCG
View the Latest Analyst Ratings

Posted-In: Clayton Allen Height Capital Markets S&P GlobalDowngrades Analyst Ratings Movers Trading Ideas Best of Benzinga

 

Related Articles (PCG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AITKeyBancUpgrades0.0
MDCitigroupUpgrades0.0
PUMPBarclaysUpgrades20.0
ECPGOppenheimerUpgrades37.0
RACEBernsteinUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

"Deep Data" To Become The Greatest Natural Resource, Tech Execs Say

Mid-Afternoon Market Update: Dow Surges 250 Points; Regional Health Properties Shares Spike Higher