2025-06-13-Jefferies-太平洋煤气电力公司（PCG）_加州事务_参议院通过SB254法案_但立法会议尚未结束_13页_830kb

PG&E Equity Research Summary

Date: June 13, 2025

Key Findings

• Rating and Price Target: Jefferies maintains a BUY rating for PG&E Corporation (ticker: PCG) but reduces the price target from $22.00 to $19.00, citing increased risks from SB254 legislation.
• Legislative Impact: SB254 passed by the California Senate reduces utility earnings power through capped capital expenditures (e.g., fire mitigation, energization projects), potentially lowering PG&E's EPS by ~10%. This legislation could ease affordability but introduces wildfire risk uncertainties.
• Financial Impact: Earnings projections show a slower EPS compound annual growth rate (CAGR) of 6.6% under SB254 compared to 9.0% under base case, with reduced rate base growth from ~10% to ~7.5%.
• Valuation Update: Downward P/E discount from -10% to -20%, resulting in a $3 reduction to the price target. Wildfire risk remains a key factor in valuation.

Financial Highlights

• Revenue and Earnings: Projected revenue growth to $28.720 billion by 2028, with EPS varying due to operational variances and costs.
• EPS Projections: Base case shows stable growth, but SB254 scenario reduces EPS by ~3.0%–9.3% over FY25-28.
• Dividend Yield: Increasing from 0% in 2023 to ~24% by 2028, though payout ratios remain moderate.

Risks and Catalysts

• Wildfire and Regulation: Ongoing legislative session through September 2025 could change risk assumptions, with potential reforms under AB 1054 mitigating wildfire liabilities.
• Catalysts: Successful implementation of wildfire mitigation, legislative amendments, or reduced affordability measures could offset some rating risks.
• Penalty Risks: High uncertainty in capex allocations and reimbursement mechanics under SB254, highlighted by regulatory reviews and financial penalties.

For detailed financial data, refer to the report's exhibits.