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What’s Next for PG&E Stock?

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Jun. 19 2019, Updated 7:35 a.m. ET

PG&E stock

PG&E (PCG) stock is one of the most volatile stocks among utilities. Recently, PG&E’s implied volatility levels were close to ~90%—higher than broader utilities’ average volatility of 14%. Last week, PG&E’s implied volatility levels peaked to 111%.

Analysts seem cautious on PG&E stock. Among the 13 analysts tracking PG&E, 11 recommended a “hold,” while two recommended a “strong buy.” None of the analysts recommended a “sell.” Analysts maintained the target price of $22.1 for the next 12 months, which indicates more than 15% potential upside. Currently, PG&E is trading at $19.1.

So far, PG&E stock has fallen more than 20% in 2019. The Utilities Select Sector SPDR ETF (XLU) has risen ~16%. PG&E stock has rallied more than 50% since the company filed for bankruptcy.

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First-quarter earnings

PG&E reported adjusted earnings of $1.04 for the first quarter. In the first quarter of 2018, PG&E reported an EPS of $0.91. The utility reported $192 million in wildfire-related costs in the first quarter. The company didn’t provide its earnings guidance for the current year due to uncertainties associated with wildfire-related liabilities.

Investors usually turn to defensives like utilities during market turmoil. Utilities have stable price movement and relatively higher dividend yields. Read Which Utility Stocks Have the Highest Dividend Yields Right Now? to learn more.

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