On Thursday, RBC Capital maintained its Outperform rating and $24.00 price target for PG&E Corporation (NYSE:PCG) shares, highlighting the utility's effective wildfire mitigation and capital investment strategies. PG&E's efforts in wildfire prevention have been particularly noted as successful, with no structures destroyed in its High Fire-Threat District (HFTD) this year, despite an increase in wildfires statewide.
The company's financial strategies have also been recognized, with PG&E receiving the first two payments from AB 1054, which demonstrates the effectiveness of financial protection mechanisms.
The analyst pointed out that California Governor Gavin Newsom's executive order is expected to align the California Public Utilities Commission (CPUC) and the Office of Energy Infrastructure Safety (OEIS), promoting more utility health-driven outcomes.
PG&E's capital expenditure (capex) plan has been robust, with the company pulling forward $1 billion into its five-year plan during Q3. Financing for these investments has been secured through the issuance of junior subordinated notes. Moreover, PG&E has filed a supplemental request for $3.1 billion of projects for 2025-2026, which is anticipated to net an addition of $2.8 billion to its total projects.
The company's focus on customer-beneficial investments is also supported by a 3.5 GW data center pipeline, which aligns with California's supportive legislative measures such as SB 410 and SB 884. RBC continues to favor PG&E's investment opportunities and the state's constructive regulatory framework.
The positive outlook for PG&E reflects confidence in the company's ongoing ability to mitigate physical and financial wildfire risks, which is expected to lead to more stable results and minimize the potential impact of future wildfires.
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