PG&E Corporation (PCG) is a significant energy holding company with a market cap of $51.3 billion. Headquartered in Oakland, it is the parent company of Pacific Gas and Electric Company, which generates, transmits, and distributes electricity and natural gas to customers. PG&E Corporation was founded in 1905 and focuses on energy, utility, power, gas, electricity, solar, and sustainability.
Shares of this large-cap utility company have underperformed the broader market over the last year. PCG has gained 2.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.6%. In 2024, PG&E Corporation stock has declined 1.1%, compared to SPX's 9.5% returns on a YTD basis.
Narrowing the focus, PCG’s gain over the past 52 weeks trails behind the S&P 500 Utilities Sector SPDR’s (XLU) 3.1% returns. Moreover, the exchange-traded fund's 12.6% returns on a YTD basis dwarfs the stock's YTD loss over the same time frame.
PCG’s weak price action relative to the broader indexes over the past year can be attributed to high interest rates and regulatory pressure on customer bills. Safety practice scrutiny, wildfire costs, and management issues further dampen investor confidence despite better-than-expected Q1 earnings.
For the current fiscal year, ending in December, analysts expect PCG to report EPS growth of 9.8% year over year to $1.35 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing the forecast on two other occasions.
Among the 12 analysts covering PCG stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, one “Moderate Buy,” and four “Holds.”
This configuration has been consistent over the past months.
After PG&E’s Q1 earnings results on April 23, JP Morgan Chase & Company (JPM) maintained its “Neutral” rating on the stock and raised the price target to $19 from $18. However, Barclays maintained its “Overweight” rating and raised the target price from $20 to $21, which implies an upside potential of 17.8%.
The mean price target of $19.86 indicates an upside potential of 11.4% from PCG’s current price levels. The Street-high price target of $22 suggests the stock could rally as much as 23.4%.
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