PG&E, Algonquin Power and Avista Are Drawing New Analyst Interest in the Utility Sector

Core Insights - Wall Street is becoming more positive on the utility sector, with upgrades for PG&E and Algonquin Power, and a neutral initiation for Avista, reflecting varying views on risk, recovery, and valuation [2]. PG&E - PG&E Corp received an upgrade to Buy from Neutral by UBS, with a price target raised to $23 from $20, driven by improvements in California wildfire policy and affordability [3]. - UBS anticipates a significant narrowing of PG&E's 43% price-to-earnings discount as risk reduces, supported by a robust data center pipeline of 3.6 GW and a five-year capital plan of $73 billion [4]. - The stock is currently trading at $18.05, approximately 22% below UBS's target, with a year-to-date increase of 13.13% and a consensus analyst target of $22.20 [4]. Algonquin Power - Algonquin Power & Utilities was upgraded to Outperform from Market Perform by Raymond James, with a price target increased to $7.25 from $6.50, as the recent share pullback is viewed as excessive [5]. - The firm believes that cost discipline and positive outcomes in key rate cases will bolster Algonquin's core regulated utility business [5]. Avista - Avista was initiated with an Equal Weight rating and a price target of $40, compared to its current price of $38.92, indicating a cautious but stable outlook for the company [6].