PCG 3Q2017: After great quarter is PCG bad luck or have bad karma or bad mgmt.?

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Market Price (11/2/2017): $56.65/share; ST-Target: $65/share; NIV: $111/share

  • Given 9-months’ of strong results, PCG should’ve bumped-up guidance and celebrated. Then BAMO! Wildfires! We wonder why PCG goes through these periodic tragedies. So, is it bad luck or bad karma? We don’t know, but certainly the market has spoken.
  • Now it seems PCG’s going to be mired in wildfire controversy for months, if not years, which likely means PCG is going nowhere despite strong results, good strategy and good execution, in our opinion
  • Other than wildfires, PCG marked another uneventful quarter. And, PCG continues to talk-up MT-LT AEPS CAGR, which we agree with
  • Given wildfires, we’re no longer certain that it has no need for new equity starting 2018
  • We continue to be intrigued with PCG’s pursuit of independent transmission projects with TransCanyon but there’s no project to be had

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