PG&E stock price target raised to $25 from $23 at BMO Capital

BMO Capital raised its price target for PG&E (PCG) to $25 from $23, maintaining an Outperform rating, based on an updated valuation methodology and revised Q3 2025 earnings estimates. This positive sentiment is reinforced by PG&E's recent $2 billion first mortgage bond sale and Fitch Ratings' upgrade to investment grade 'BBB-', which acknowledges the company's progress in mitigating wildfire risks and the support from California's Senate Bill 254. Concurrently, Jefferies, while adjusting its price target to $20 from $22, maintained a Buy rating, citing reduced financial wildfire risk and a projected 9% annual EPS growth through 2030, collectively indicating a strengthening financial outlook for the utility.

Analysis

BMO Capital has increased its price target for PG&E (PCG) to $25 from $23, maintaining an Outperform rating, driven by an updated sum-of-the-parts and mark-to-market valuation methodology. This positive sentiment is reinforced by BMO's revised third-quarter 2025 earnings estimate to $0.41 per share, up from $0.37, despite lighter first-half 2025 earnings. Jefferies also maintained a Buy rating, projecting a 9% annual EPS growth rate through 2030, though it adjusted its price target to $20 from $22.

PG&E's financial stability has notably improved, evidenced by Fitch Ratings upgrading its credit to investment grade 'BBB-' from 'BB+'. This upgrade acknowledges significant progress in mitigating wildfire risks, largely supported by California's Senate Bill 254, which established an $18 billion fund for catastrophic wildfire liabilities. The company recently bolstered its capital structure with a $2 billion sale of first mortgage bonds, extending maturities through 2055.

Looking ahead, PG&E is expected to introduce fiscal year 2026 guidance and provide an update on its data center pipeline during its upcoming earnings call. The utility is also advancing its operational resilience and ESG initiatives, having completed the Calistoga Resiliency Center, a hybrid microgrid designed to provide power during Public Safety Power Shutoffs. Wildfire reform, including initial high-level Climate Change Response recommendations, remains a central focus following SB 254.

Key Decisions for Investors

• Investors should consider the improved credit rating and reduced wildfire risk as positive indicators for long-term stability.
• Monitor the upcoming earnings call for 2026 guidance and data center pipeline updates to assess future growth trajectories.
• Evaluate the continued effectiveness of wildfire mitigation strategies and regulatory support (SB 254) as critical factors influencing liability exposure and operational costs.