Bank of America CorpBAC
Mentioned
Impact on stocks 2
Financials
Bank of America CorpEnergy Transition & Power Demand
PG&E CorpPCG
Mentioned
BofA downgrades PG&E to Neutral on wildfire reform shortfall
Analyst
Bank of America downgraded PG&E Corp. to Neutral from Buy, citing California's latest wildfire legislation as failing to provide the durable liability and financing framework needed for the utility's ambitious investment plans. The bank cut its price objective to $13 from $24, noting that Senate Bill 492 improves protections for wildfire survivors but leaves key utility risks unresolved, including liability, insurance subrogation, and inverse condemnation. BofA now assumes PG&E will remove $7.3 billion from its roughly $23 billion of capacity and new-business investments, a modelling assumption rather than company guidance, which would lower projected EPS growth to about 7% through 2030, with EPS forecasts of $1.78 in 2027 and $1.90 in 2028, down from previous estimates of $1.79 and $1.96. The firm suggests the foregone investment could be returned to shareholders between the third quarter of 2026 and the fourth quarter of 2030, potentially lifting the dividend yield to about 6.5% and the payout ratio to roughly 43%-50%, though PG&E has not announced such a plan. The Wildfire Fund remains a central vulnerability, and BofA sees PG&E's investor update on Wednesday as the next key catalyst for changes to capital spending, growth targets, and shareholder returns.
Bank of America CorpPG&E Corp