PG&E Corporation (PCG): The Earnings Recovery Is Real, But the Capital Plan Is Being Rewritten
Ticker: PCG Latest close: $12.35 on October 5, 2026 Updated rating: Buy
Summary
I maintain my Buy rating on PG&E Corporation (PCG), but this is a risk-aware Buy. The valuation offers a margin of safety, while wildfire liability, leverage and the capital-plan reset remain material risks.
2Q FY 2026 core earnings were $920Mn, or $0.40 per diluted share, up from $674Mn, or $0.31, a year earlier. PG&E reaffirmed 2026 core EPS guidance of $1.64-$1.66. In September, PG&E initiated 2027 core EPS guidance of $1.78-$1.82 while it reviewed its longer-term capital and financing framework.
The earnings recovery and near-term balance-sheet work strengthened the original thesis, but the $2Bn deferral of planned 2027 investment and the strategic review weakened long-term rate-base visibility.
My base target is $17.35 per share, using 2027E core EPS of $1.80, a conservative 10.5x P/E, and a 9% one-year discount. That implies about 40% upside from the October 5 close.
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Source; Getty Images
