PG&E Downgraded as California Wildfire Reform Falls Short

Wells Fargo cut PG&E to Equal Weight with a $24 target and BMO downgraded to Market Perform with a $21 target after California lawmakers’ SB492 wildfire-liability reform fell short, leaving PG&E exposed to uncapped wildfire costs and no mechanism to replenish the Wildfire Fund. BMO now adds about $10 of liability drag per share under adverse outcomes, while Wells Fargo highlights missing protections such as a per-event cap and fund mechanics. Both banks expect management to adjust capital allocation, with Wells Fargo signaling potential buybacks and BMO suggesting a higher dividend. PG&E traded in the mid-teens (around $16.60) in late August amid ongoing regulatory and liability uncertainty.