For questions about this article or underlying research, email help@trefis.com.
PG&E (PCG) shares fell 1.3% on October 22, 2026, the day the utility reported its fiscal Q3 2026 results. The S&P 500 lost 1.2% that session, so PG&E moved in tandem with the broader market. The stock diverged from its peers, however, as NextEra Energy, Southern and Duke Energy rose between 3.8% and 4.6%. Management says customer capital investment is the main source of PG&E’s earnings growth. Did anything in the quarter put that growth in doubt?
Image from Pixabay
PG&E’s Earnings Forecasts Held Through 2027
On the October 22 call, management reaffirmed its 2026 core EPS forecast of $1.64 to $1.66. This range represents a 10% increase from 2025 at the midpoint, matching the figure PG&E provided in its July 23 release. Management also stood by its 2027 forecast of $1.78 to $1.82, which projects a 9% gain at the midpoint. Core EPS for the third quarter came in at $0.41, bringing the first nine months to $1.24, a total management said keeps PG&E on track for its full-year forecast.
Based on reported figures, PG&E posted an operating margin of 20.2% over the twelve months to September 30, 2026. This marks the company’s highest operating margin at any quarter end since fiscal Q4 2016. Net income for the quarter fell to $776 million from $850 million a year earlier, though management said last year’s third quarter carried an extra catch-up for the first two quarters from a tax method change. The stock also is cheap on reported earnings: PG&E trades at 9.4 times its earnings over the past twelve months, compared with 22.8 for the S&P 500.
What PG&E Left Open Beyond 2027
Management said on the call that PG&E will no longer provide guidance beyond 2027 while it conducts a strategic review. The options range from corporate ring fencing to sales and separations, and management expects to share the outcome no later than summer 2027.
PG&E maintained its 2027 earnings forecast even after cutting $2 billion from its 2027 capital plan. Management announced this reduction on September 2, 2026, tying the decision to high financing costs. The utility still expects to spend $11.4 billion in 2027, but management said the cut will delay some customer projects, including connections of new clean energy resources. Management also said that PG&E has already covered its expected equity financing needs through 2030 and would not issue shares at the current stock price.
How Heavy Is PG&E’s Debt For Shareholders?
PG&E’s total debt equals 224.8% of its market value, compared with 19.4% for the S&P 500. Free cash flow was negative $4.98 billion over the twelve months to September 30, 2026, so the company spends more than its operations bring in. Management plans to fund its 2027 capital spending with cash from operations alongside $4 billion to $5 billion of utility debt, including around $1 billion of maturities. Management also said a credit rating agency revised its outlook on PG&E to negative during the quarter.
The third quarter kept PG&E’s earnings forecasts for 2026 and 2027 in place and left everything after 2027 to a review due by summer 2027. So on management’s own forecasts, the quarter did not put growth through 2027 in doubt. PG&E’s 2027 core EPS forecast, and whether management still stands by it, is the figure to watch at the next report, expected in February 2027.
What Would Another Fall In PG&E Do To Your Plan?
A fall hurts most when one stock is a large part of what you own, and selling it to spread the risk can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to put a floor under a large position and unwind it with less tax.
Request A Free Strategy Review
Spot an error or want more like this? Tell us in 10 seconds.
Source: www.trefis.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
