Mizuho lowered its price target on PG&E Corporation to $14 from $16, maintaining a Neutral rating, after the California utility announced a $2 billion reduction to its 2027 capital expenditure plan, bringing the figure to $11.4 billion. The adjustment came during a strategic update on Tuesday morning.
The cuts follow the adjournment of the California Assembly without a vote on Senate Bill 492, leaving wildfire liability reform in limbo and spurring utilities to push for an extraordinary legislative session before year-end. Mizuho said meaningful reform would require the state Senate to shift its position, which current leadership has not shown willingness to do.
Insurance subrogation continues to block progress on wildfire liability reform, analysts said. During its update, PG&E made no changes to its general rate case and announced no plans for a stock buyback or dividend adjustments.
PG&E is undergoing a strategic review to potentially separate its wildfire risk operations and unlock shareholder value. The process could take between 12 and 18 months to secure regulatory approval, according to Mizuho. Leadership remains in place through the first quarter of 2027.
Other firms also revised their positions. BofA Securities cut its price target to $13, downgrading from Buy to Neutral. Wells Fargo held its target at $24 but downgraded to Equal Weight. BMO Capital reduced its target to $21, moving from Outperform to Market Perform. UBS maintained a $22 target with a reiterated Buy rating.
Mizuho also lowered its price target on Sempra Energy to $84, downgrading from Outperform to Neutral.
Analyst concern across multiple firms centers on California's wildfire liability framework, insurance subrogation issues, and the failure of SB 492 to adequately address utility funding risks.
