PCG
PG&E Corporation
$16.49
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 33.0% below fair value
You pay
$16.49
Bear
$21.53
Fair
$24.61
Bull
$27.69
Bear
$21.53
+30.6%
$1.59 × 14x P/E
Fair
$24.61
+49.2%
$1.59 × 16x P/E
Bull
$27.69
+67.9%
$1.59 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
10.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $22.67 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $24.61 per share.
Warnings
The company's reported profits differ from official accounting profits by 35%. Check what costs are being left out of the adjusted number.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples