Mizuho Securities reduced its price target on PG&E Corporation to $14 from $16 while maintaining a Neutral rating, citing the utility’s decision to cut 2027 capital expenditures by $2 billion to $11.4 billion.
The move follows a Tuesday status update in which PG&E provided no updates to its general rate case, did not announce any share buyback or dividend changes, and reiterated a strategic review that could separate wildfire risk under its current holding structure. Regulatory approval for such a separation, if pursued, is not expected before 2027, with a timeline of 12 to 18 months once an application is filed.
Multiple analysts adjusted their assessments of PG&E after the capex reduction. BofA Securities downgraded the stock to Neutral from Buy and lowered its price target to $13, while Wells Fargo shifted its rating to Equal Weight from Overweight with a $24 target. BMO Capital downgraded to Market Perform from Outperform with a $21 target, and UBS maintained a Buy rating with a $22 target.
Mizuho also downgraded Sempra Energy to Neutral from Outperform, cutting its price target to $84. The revisions reflect broader concerns over regulatory and legislative risks in California, where utilities are pushing for a special legislative session by year-end to address financing challenges.
California’s SB 492, aimed at reforming wildfire liability protections, failed to advance after the Assembly adjourned without a vote, raising questions about the adequacy of protections for utilities like PG&E. Analysts noted that meaningful reform would require a shift in the Senate’s stance, a change current leadership has not signaled.
