Dan Loeb's PG&E Play: Growth, Resilience, And $63 Billion Investments

Pacific Gas & Electric Co. (NYSE:PCG) stock has recently faced volatility amid shifting investor sentiment and market dynamics.

Activist investor Dan Loeb‘s hedge fund, Third Point, held 49.7 million shares in utility company Pacific Gas & Electric Co. (NYSE:PCG) as of Sept. 30, 2024, making it the fund’s largest holding at the time.

On Jan. 13, 2025, BMO Capital analyst James M. Thalacker initiated coverage on the company with an Outperform and a price target of $21.

The analyst writes that he views PCG shares as a core holding in the regulated utility sector, offering investors a rare combination of deep value and premium, visible growth potential.

Thalacker’s five-year forecast (2024-2028) projects EPS growth of around 9.2% and rate base growth of about 10%, aligning with the company's long-term EPS target of at least 9%.

Also, on Dec. 17, JPMorgan analysts Jeremy Tonet and Richard W. Sunderland stated that they believe PG&E's wildfire mitigation investments, data center pipeline and re-rating potential could drive substantial gains. 

Notably, last month, the Department of Energy disclosed plans to provide Pacific Gas & Electric with a record $15 billion loan guarantee to strengthen its electrical grid and support climate resiliency initiatives.

If finalized, the loan guarantee for PG&E’s Project Polaris will support hydropower, battery storage, transmission upgrades, and virtual power plants across its service area.

The Energy Department said that these infrastructure investments will enable PG&E to address projected load growth, enhance electric reliability, and lower costs for consumers throughout California.

Earlier, during its third-quarter earnings call, PCG raised its five-year capital investment plan by $1 billion, bringing the total to $63 billion for the 2024-2028 period.

The company also reaffirmed its equity issuance guidance of $3 billion for 2025-2028.

The company expects to release its fourth-quarter earnings results in February 2025.

Investors can gain exposure to the stock via VanEck Uranium and Nuclear ETF (NYSE:NLR) and Themes ETF Trust Themes Uranium & Nuclear ETF (BATS:URAN).

Price Action: PCG shares are up 4.71% at $17 at last check Wednesday.

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