Pacific Gas & Electric Co (PCG)

[r clarke]

Investors are becoming overly optimistic about the outlook for PG&E (PCG -0.7%), Morgan Stanley says, as the stock has rebounded 28% over the past month as court filings and reports offer more insight into the company's expectations for what it will need to pay in wildfire liabilities.

"We believe that many investors have grown optimistic about a potential enduring 'fix' to utility liability for wildfire damages, and we urge caution on this topic," Stanley analyst Stephen Byrd writes.

California's SB901 provides a way to offset wildfire costs for utilities by essentially capping the amount a company would be required to pay, but Byrd believes lawmakers and voters may not be so eager to make it easier for utilities to avoid responsibility for wildfires that were started at last in part by their equipment.

https://seekingalpha.com/news/3442910-pg-and-e-investors-optimistic-wildfire-liability-fix-morgan-stanley-says