PCG, EIX Stocks Head For Worst Week In A Year As They Reel From California Wildfire Reform Setback: BoFA Turns Neutral, Slashes Targets

BofA downgraded both utilities after SB 492 failed to address key wildfire financing risks.

• BofA downgraded PG&E to ‘Neutral’ and cut its target to $13, saying SB 492 fails to reduce wildfire liability risks. 
• The setback could complicate PG&E’s $73 billion capital plan and challenge its projected 9% earnings growth through 2030. 
• BofA downgraded Edison International to ‘Neutral’ and cut its target to $51, citing continued liability risks and policy uncertainty. 

PG&E Corp. (PCG) and Edison International (EIX) are heading for their worst week in a year after California’s wildfire reform setback fell short of investors' expectations for stronger liability protections. Bank of America downgraded both stocks, deepening investor concerns over wildfire exposure, funding risks and potential financial liabilities. 

PG&E stock inched 0.3% lower overnight, heading into Wednesday, while Edison International stock edged 0.3% higher. However, both stocks are headed for their worst week since January 2025. 

PG&E Faces Unresolved Financial Exposure

Bank of America has turned more cautious on California’s two major investor-owned utilities, downgrading them and slashing price targets after wildfire legislation failed to deliver the risk protections investors expected.

BofA analyst Ross Fowler downgraded PG&E to ‘Neutral’ from ‘Buy’ and reduced the price target to $13 from $24. Fowler said Senate Bill 492 does not resolve the utility’s exposure to wildfire-related financing and liability risks.

The analyst said SB 492 gives greater attention to wildfire survivors but does little to change the financial risks facing PG&E. That leaves a key piece of the company’s investment outlook uncertain, particularly as PG&E prepares to execute a capital program worth about $73 billion.

BofA said PG&E’s expected 9% earnings growth from 2027 to 2030 depends on better wildfire laws. Without those changes, investors may need to rethink the company’s long-term growth outlook. 

Edison Faces Greater Wildfire Risk 

Fowler delivered a similar verdict on Edison International, downgrading the stock to ‘Neutral’ from ‘Buy’ and cutting its target to $51 from $81. He described the California effort as a potential “once-in-a-generation reform opportunity” that ultimately failed to meet expectations.

For Edison, the weaker-than-expected legislation created a less attractive balance between potential gains and risks, according to BofA. The firm expects uncertainty to remain an issue for the stock as wildfire threats stay elevated and investors may have to wait another year for greater clarity on state policy.

California Lawmakers Drop Wildfire Policy Proposal

Meanwhile, on Tuesday California Assembly Speaker Robert Rivas declined to bring SB 492 to a vote, ending the measure on the final day of the legislative session. The bill was intended to address how investor-owned utilities would handle financial responsibility after major wildfires.

The proposal did not include a provision sought by PG&E and Edison International that would have shifted part of future wildfire costs toward insurers. The utilities also wanted restrictions on insurers pursuing reimbursement claims, known as subrogation.

“The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve. So, we are going back to work — and we will not stop until we have done everything in our power to deliver real results,” said Rivas.  

PCG, EIX Stocks: Retail View 

On Stocktwits, retail sentiment around both PCG and EIX stocks remained in ‘extremely bullish’ territory. 

While PCG stock tumbled 12% year-to-date. EIX stock has dropped 2%.

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