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The analysts told investors in a note that their view is based on the declining wildfire risk and the fact they see positive catalysts ahead.
They outlined five drivers for the stock: “1) Top quartile EPS growth of 9%; 2) Improving credit metrics; 3) Better wildfire risk mitigation; 4) A 25% group P/E discount based on our $1.49 in ’25 and 5) Several catalysts.”
The catalysts “include a final decision in the general rate case potentially third quarter, reinstatement of the dividend on the third quarter conference call and completion of Fire Victim Trust share sale sales (only 3.3% of outstanding),” the analysts wrote.
“Regulatory lag and investor crowding represent risks to our view but we still view California as an improving regulatory environment. PCG trades at a $11 billion market cap discount which would be 12 years of maximum fire outlays,” the analysts concluded.
