PCG....Should call MMTIF...Power line unit can detect this type
malfunction with enough time to prevent fires.
Excerpt..."using a search firm to identify new board members with a “fresh perspective” as it looks to beef up its fire safety protocols."
It’s yet another down day for PG&E stock (PCG) after the utility announced late Friday that it will change the makeup of its board of directors in the wake of California’s deadly wildfires and amid bankruptcy fears.
Where we were: PG&E shares have taken a beating, losing almost half their value since October as investors fret about the ramifications of the wildfires.
Where we’re headed: Plenty of unknowns remain, keeping analysts on the sidelines.
PG&E stock is falling again on Monday, as the shadow of California’s wildfires continues to cloud the utility’s future.
Read: For PG&E Stock, Wildfire Liabilities Are a Wild Card
Late Friday, PG&E said that it’s looking to shake up its board of directors, using a search firm to identify new board members with a “fresh perspective” as it looks to beef up its fire safety protocols. However, investors were more spooked by the fact that the company is reviewing unnamed “structural options,” as the announcement came the same day as a Reuters report that said PG&E was exploring bankruptcy for some or all of its businesses.
In a statement, PG&E said it was working to “assess the company’s potential liabilities as a result of the wildfires and the options for addressing those liabilities.”
UBS ’s Daniel Ford reiterated a Neutral rating on the shares but raised his price target by $3, to $29, as he believes that recent disclosures support the company’s position that it was not responsible for the 2017 Tubbs fire. Given the historical timeline for wildfire investigations, Ford expects a report on the Tubbs fire in the next few weeks.
The California legislature is back in session from the holiday break, but Ford sees “no haste for action…A Blue Ribbon panel report is due in July, but we do not expect appointments until Spring.” The Blue Ribbon panel is expected to study the costs of California wildfires and make recommendations to the state legislature and governor.
Likewise, Guggenheim’s Shahriar Pourreza reiterated a Neutral rating on PG&E while writing that it could become a “material value play,” but it’s too early to make that call given all the unresolved variables. “We await more visibility with PG&E as we believe Edison International (EIX) remains the ‘safer’ way to play CA (outside of Buy-rated Sempra Energy (SRE)).”
PG&E was down 20.7% to $19.34 in recent trading.
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Investors are also worried about what penalties may be ahead for the utility.
At least Edison’s dividend looks safe.
Write to Teresa Rivas at teresa.rivas@barrons.com
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