Investing.com -- JPMorgan assumed coverage of PG&E Corp (NYSE:PCG) with an Overweight rating and a $22 price target, and Edison International (NYSE:EIX) with a Neutral rating and a $72 price target, keeping both unchanged.
The California utility stocks have underperformed sharply this year, with PCG down 22% and EIX down 36%, as investors react to wildfire risks. Despite the broad selloff, JPMorgan believes market concerns may be overstated, citing years of mitigation efforts and the continued availability of the state’s wildfire fund under Assembly Bill 1054.
While PCG has no exposure to January’s Eaton (NYSE:ETN) Fire, EIX remains under scrutiny, with a potential gross liability estimated at $16 billion. JPMorgan expects a policy or regulatory response could help stabilize valuations, though uncertainty over fire fund sufficiency may keep pressure on the sector.
Between the two, JPMorgan favors PCG, given its lack of exposure to the latest wildfires, while EIX could face an extended review process over its potential liability.
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