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1. Company Snapshot

1.a. Company Description

PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to customers in northern and central California, the United States.It generates electricity using nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic sources.As of December 31, 2021, the company owns and operates approximately 18,000 circuit miles of interconnected transmission lines; 33 electric transmission substations, approximately 108,000 circuit miles of distribution lines, 67 transmission switching substations, and 753 distribution substations; and natural gas transmission, storage, and distribution system consisting of approximately 43,800 miles of distribution pipelines, approximately 6,200 miles of backbone and local transmission pipelines, and various storage facilities.


It serves residential, commercial, industrial, and agricultural customers, as well as natural gas-fired electric generation facilities.The company was incorporated in 1905 and is headquartered in San Francisco, California.

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1.b. Last Insights on PCG

PG&E Corporation's recent momentum is driven by its $73B grid modernization plan, aimed at enhancing service reliability and expanding clean-energy capacity. The company's Q4 earnings matched estimates, with revenues rising year-over-year and operating income improving. PG&E also narrowed its 2026 EPS guidance, implying 10% growth, with core EPS expected to reach $1.64 to $1.66. Favorable decisions from the CPUC and ongoing clean energy investments are expected to drive operations.

1.c. Company Highlights

2. Pacific Gas & Electric Co.'s Earnings Report: A Strong Year with Growth Prospects

The company's financial performance in 2025 was impressive, with core earnings per share reaching $1.50, up 10% from 2024, and within the midpoint of the EPS guidance range. Revenue growth is estimated to be around 3.2% for the next year. The actual EPS for the quarter came out at $0.36, slightly below estimates of $0.3641. The company's efforts to improve safety, reliability, and affordability for customers have been successful, with a 43% reduction in serious injuries and fatalities, and a 19% improvement in systemwide performance.

Publication Date: Feb -13

📋 Highlights
  • 2025 Core Earnings Growth: Achieved $1.50/share core EPS, up 10% YoY, marking fourth consecutive year of double-digit growth.
  • 2026 EPS Guidance Raised: Tightened to $1.64–$1.66/share, implying 10% growth, with 2027–2030 outlook reaffirmed at >9% annually.
  • Safety Improvements: 43% reduction in serious injuries/fatalities (2025 vs. 2024); 30% lower preventable motor vehicle incidents.
  • Affordability Progress: Residential bills down 11% from January 2024, now below U.S. average share of wallet, with 0%–3% future bill trajectory target.
  • Capital Efficiency: Capital-to-expense ratio improved to 1.0 (from 0.8), enabling $0.09 savings redeployment to customers via 160+ waste-elimination initiatives.

Operational Highlights

The company's operational performance has been strong, with significant milestones achieved in the past year, including a 40% reduction in ignitions, resulting in the third consecutive year with no major fires caused by the company's equipment. Electric reliability improved by 19% year over year, and the company now has 3.6 gigawatts of data center demand in the final engineering stage. According to Patricia Kessler Poppe, CEO, the company's performance playbook has been effective in driving savings, with a target future bill trajectory of 0% to 3%.

Valuation Metrics

To understand what's priced into the stock, we can look at various valuation metrics. The current P/E Ratio is 14.26, P/B Ratio is 1.21, and P/S Ratio is 1.56. The EV/EBITDA ratio is 9.96, indicating the company's enterprise value relative to its earnings before interest, taxes, depreciation, and amortization. The Dividend Yield is 0.71%, and the Free Cash Flow Yield is -7.18%. The ROE is 8.73%, and the ROIC is 3.64%. These metrics suggest that the company's valuation is reasonable, but the negative free cash flow yield is a concern.

Growth Prospects

The company is optimistic about its growth prospects, with 3.6 gigawatts of data center demand in the final engineering stage. Patricia Kessler Poppe stated that the company sees a higher growth level, with 50% of the 3.6 gigawatts online by 2030, contributing to the 2% to 4% load growth in the simple, affordable model. The company's capital plan is expected to support this growth, with a $73 billion five-year capital plan and no new common equity required through 2030.

Credit Metrics

The company's credit metrics have improved, with Fitch recently upgrading the company to investment-grade. Moody's and S&P have also indicated that the company's financial metrics meet investment-grade criteria. The company's commitment to mid-teens FFO-to-debt metrics and building a sustainable financing plan is expected to support its credit profile.

3. NewsRoom

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PG&E, Algonquin Power and Avista Are Drawing New Analyst Interest in the Utility Sector

14:43

Source: 247wallst.com

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PG&E Lowers Electric Prices in March, Fifth Electric Rate Drop Since Early 2024

Mar -02

Source: prnewswire.com

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National Consumer Protection Week: PG&E Encourages Customers to Hang Up, Close the Door and Slam the Scam

Mar -02

Source: prnewswire.com

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PG&E Introduces Clean Energy Calculator Powered by GridX to Help Customers Plan and Save on Electric Upgrades

Feb -25

Source: businesswire.com

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Baron & Budd, P.C. Announces $38 Million Resolution with PG&E on Behalf of Six Public Entities Related to the 2022 Mosquito Fire

Feb -24

Source: businesswire.com

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Amazon, Merck, PG&E And More On CNBC's 'Final Trades'

Feb -24

Source: feeds.benzinga.com

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Sunrun and PG&E Dispatch Energy from Northern California Homes to Form Distributed Power Plants Providing Local Grid Relief

Feb -24

Source: globenewswire.com

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Market Today: Blue Owl payout, GDP miss, oil and EV moves

Feb -20

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Utilities - Combined

Expected Growth: 3.0%

The utilities sector, specifically PG&E Corporation, is driven by steady demand for electricity and gas, regulatory support, and investments in infrastructure. A growth rate of 3.0% reflects stable cash flows, low-risk profile, and potential for long-term contracts, making it an attractive sector for investors seeking predictable returns.

7. Detailed Products

Electricity

PG&E Corporation generates and distributes electricity to residential, commercial, and industrial customers in California.

Natural Gas

PG&E Corporation also distributes natural gas to residential, commercial, and industrial customers in California.

Renewable Energy

PG&E Corporation offers renewable energy products, including solar and wind power, to customers who want to reduce their carbon footprint.

Energy Efficiency Programs

PG&E Corporation offers various energy efficiency programs, including rebates and incentives for customers to upgrade to energy-efficient appliances and lighting.

Smart Meters

PG&E Corporation offers smart meters to customers, which provide real-time energy usage data and enable customers to make informed decisions about their energy consumption.

Electric Vehicle Charging

PG&E Corporation offers electric vehicle (EV) charging services, including EV charging stations and special EV rates for customers who charge their vehicles at home.

8. PG&E Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

PG&E Corporation operates in the utility industry, specifically in the generation, transmission, and distribution of electricity and natural gas. While there are alternative energy sources such as solar and wind power, the threat of substitutes is moderate due to the existing infrastructure and customer loyalty.

Bargaining Power Of Customers

PG&E Corporation has a large customer base, and individual customers have limited bargaining power due to the essential nature of the services provided. The company also has a regulated pricing structure, which limits the ability of customers to negotiate prices.

Bargaining Power Of Suppliers

PG&E Corporation relies on various suppliers for equipment, fuel, and other materials. While the company has a significant market share and can negotiate prices, the suppliers also have some bargaining power due to the concentrated nature of the industry.

Threat Of New Entrants

The utility industry is heavily regulated, and new entrants face significant barriers to entry, including high capital requirements, regulatory hurdles, and established brand loyalty. This limits the threat of new entrants.

Intensity Of Rivalry

The utility industry is highly competitive, with several major players operating in the same market. PG&E Corporation competes with other utility companies, such as Edison International and Sempra Energy, for market share and customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.93%
Debt Cost 4.81%
Equity Weight 34.07%
Equity Cost 7.53%
WACC 5.74%
Leverage 193.52%

11. Quality Control: PG&E Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Exelon

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Value: 6.7

Growth: 3.8

Quality: 4.4

Yield: 7.0

Momentum: 8.5

Volatility: 10.0

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Dominion Energy

A-Score: 6.5/10

Value: 5.8

Growth: 3.6

Quality: 5.0

Yield: 8.0

Momentum: 7.0

Volatility: 9.7

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DTE Energy

A-Score: 6.2/10

Value: 4.8

Growth: 3.7

Quality: 4.1

Yield: 7.0

Momentum: 7.5

Volatility: 10.0

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NextEra Energy

A-Score: 6.1/10

Value: 2.5

Growth: 5.9

Quality: 5.5

Yield: 6.0

Momentum: 8.0

Volatility: 8.7

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Xcel Energy

A-Score: 6.0/10

Value: 4.3

Growth: 4.6

Quality: 3.2

Yield: 6.0

Momentum: 8.0

Volatility: 10.0

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Pacific Gas and Electric

A-Score: 4.4/10

Value: 7.4

Growth: 4.0

Quality: 4.0

Yield: 1.0

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.17$

Current Price

18.17$

Potential

-0.00%

Expected Cash-Flows