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PG&E Corporation PCG

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The bet you're really making is that PG&E keeps burying and rebuilding thousands of miles of power line across northern California, and that California keeps letting it charge customers enough to earn a steady profit on all that spending. You're betting it gets through the dry summers without its equipment starting another deadly fire. Right now it is going well: first-half revenue up 8%, profit per share climbing about 10% a year, and a capital program underway that management has described as targeting roughly $12 billion for 2026. You pay about 10 times last year's earnings and 1.1 times book value, half what a safer utility costs and near the low end of its own decade, because a fire it starts could still bankrupt it again.

Key data

Price$14.30
52-week range$12.59 – $19.16
P/E (TTM / FY28E)10.4x / 7.3x
Price / book1.1x

PCG · price with moving averages

Daily · 6MWeekly · 3Y
$13$15$18$20$22 Sep '23Apr '24Nov '24Jul '25Feb '26Sep '26 BID
EMAs82140

Source: market data.

The business

PG&E is described in company materials as the largest investor-owned utility in the United States by customers, delivering electricity and natural gas to about 16 million people across northern and central California. It is a legal monopoly: no one else owns the wires and pipes in its territory, and in exchange the state regulator, the CPUC, sets the rates. The economics are simple. PG&E invests in poles, wires, substations and pipelines, that pile of capital is the rate base, and the regulator lets it earn a set return on the base. Spend more, earn more. So the company is spending furiously, with capital deployment described in recent commentary as targeting roughly $12 billion for 2026, much of it burying thousands of miles of power line so a falling wire cannot spark the next fire. Second-quarter revenue was flat at $5.9 billion, but the first half rose 8% to $12.8 billion as electric rates stepped up. The thing customers actually feel is the bill, and it keeps rising.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05Closing thoughts
  6. 06Methodology

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