PCG
PG&E Corporation
$17.85
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 28.5% below fair value
You pay
$17.85
Bear
$21.84
Fair
$24.96
Bull
$28.08
Bear
$21.84
+22.3%
$1.59 × 14x P/E
Fair
$24.96
+39.8%
$1.59 × 16x P/E
Bull
$28.08
+57.3%
$1.59 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
11.2x
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 $23.83 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $24.96 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