PG&E, Edison Plunge as Wall Street Weighs California Wildfire Risk
(Bloomberg) -- PG&E shares saw their worst one-day plunge in 16 years, while utility peer Edison International is having its worst day since 2001 amid California wildfires that began in PCG's service territory.
- PG&E fell as much as 38 percent in its biggest one-day decline since August 2002; the stock triggered at least one volatility halt as trading opened
- Edison dropped as much as 25 percent, its biggest intraday fall since April 2001
- Evercore ISI analyst Greg Gordon (outperform) cut PG&E's PT to $49 from $55, based on a $3.5 billion "exposure placeholder" for the Camp fire; says every $1b of higher exposure to Camp fire liability would hit Evercore's PT by a little over $1/share
- Gordon notes PG&E fell 16.5 percent on Friday, and stock is trading just above book value as at the end of third quarter of $37.60/share; shares are discounting over $20b of exposure to fire liabilities, and "it could trade lower, but we think there is value here"
- Goldman Sachs analyst Michael Lapides expects incremental investor concern for PG&E and Edison as the fires continue to grow
- Notes California's wildfire legislation that passed in late August (SB901) doesn't contain provisions regarding wildfire recovery for potential 2018 fires
- Morgan Stanley's Stephen Byrd writes PCG/EIX shares now reflect $17b/$5b for 2017-2018 fires, including a permanent 25%/20% discount to peers
- Adds that "implied damage likely exceeds shareholder liability and underscores need for further reforms"
- PG&E has 9 buys, 9 holds, 0 sells avg PT $53: Bloomberg data
- YTD: PCG -11% vs S5UTIL Index +4%
- NOTE: Nov. 9, Big New Fire Could Boost Danger for PG&E Investors: BI React
To contact the reporter on this story: Michael Bellusci in Toronto at mbellusci2@bloomberg.net
To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Christiana Sciaudone
©2018 Bloomberg L.P.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
