Electric and gas utility operator PG&E Corporation ( PCG ) on Monday caught a big downgrade from analysts at Jefferies & Co.
The firm said it cut its rating on PCG from "Buy" to "Hold" and lowered its price target from $51 to $48.50. That new target implies a smaller 8% upside to the stock's Friday closing price of $44.78.
Jefferies also cut its 2012 and 2013 EPS estimates to $3.65 and $3.60, respectively. The analyst commented, "We were previously assuming that the company would be able to earn of some $1.5 billion of CWIP annually (which has been the average for the company in the past several years) on top of their rate base earnings, as it has been the case in the past. It is our understanding now that large portion of those earnings are expected to be offset by expenses coming from charitable contributions, advertising and public affairs, which are not refundable in rates."
PG&E shares fell 87 cents, or -1.9%, in premarket trading Monday.
The Bottom Line
Shares of PG&E Corporation ( PCG ) have a 4.06% dividend yield, based on Friday's closing stock price of $44.78. The stock has technical support in the $42-$43 price area. If the shares can firm up, we see overhead resistance around the $46-$47 price levels.
PG&E Corporation ( PCG ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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