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How PG&E Stock Fared Last Week

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Nov. 20 2020, Updated 4:51 p.m. ET

PG&E stock

PG&E (PCG) stock fell the most among utilities last week, by more than 9%. JPMorgan Chase raised PCG’s price target from $11 to $14 on April 17. The stock rose ~20% in the week prior, following California Governor Newsom’s proposal of a wildfire fund to finance wildfire-related liabilities. PG&E stock has risen ~190% in the last three months, while utilities overall have gained ~8%.

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High risks pay off

There was severe downward pressure on PG&E stock in January before it filed for Chapter 11 bankruptcy protection. The stock, which touched a multiyear low of ~$5 in mid-January, recovered to ~$24 last week.

According to The Wall Street Journal, Abrams Capital Management, Knighthead Capital Management, and Redwood Capital Management bought PG&E stock during its weakness, and are sitting on a hefty unrealized collective gain of ~$700 million.

While PG&E’s board restructuring continues, its stock could stay volatile. PCG’s implied volatility touched 70% last week, whereas broader utilities’ (XLU) (VPU) average volatility is 11%.

PG&E is facing ~$30 billion in liabilities associated with wildfires in 2017 and 2018. November’s Camp Fire, the most devastating fire in California’s history, killed 86 people.

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