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What’s Next for PG&E Corporation Stock?

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Approval of debtor-in-possession loan

According to Reuters, PG&E (PCG) won a court approval on March 27 for a $5.5 billion loan to help keep up its electric and gas delivery operations.

PG&E stock has surprisingly shown a significant rally this year. The stock has surged more than 50% since it filed for bankruptcy in January. Prior to PG&E’s filing for bankruptcy, its stock touched a record low level of ~$5.0. Speculators who bought PG&E at close to that level just ten weeks ago could be sitting on a hefty gain of more than 250% at the moment.

PCG stock is currently the most volatile stock among utilities. Its implied volatility is at 60% compared to utilities’ (XLU) average volatility level of ~12%. PCG is trading in the oversold zone with a relative strength index of below 30.

Investors seem to have faith in PG&E stock. Over the past 12 months, PCG has fallen more than 60%, while state peer Sempra Energy (SRE) has risen ~12%, and Edison International (EIX) has risen 1%.

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