7 Most Undervalued Utility Stocks To Buy According To Analysts

2. PG&E Corporation (NYSE:PCG)

Upside Potential: 14.33%

Forward P/E Ratio as of October 7: 14.51

Number of Hedge Fund Investors: 46   

PG&E Corporation (NYSE:PCG) is a utility company based in California that provides natural gas and electricity to millions of customers. The company plays a crucial role in California’s energy landscape and is investing in renewable energy sources, electric vehicle infrastructure, and wildfire safety measures to enhance service reliability and environmental responsibility.

In Q2 2024, PG&E Corporation (NYSE:PCG) reported a 13.16% year-over-year revenue growth, raising its earnings guidance by 10% into 2025 and 9% annually through 2028. The company’s net profit grew 28.08% to $520 million from $406 million compared to the same quarter in the previous year.

The California Public Utilities Commission (CPUC) has approved additional CapEx funding requirements for PG&E Corporation (NYSE:PCG), allowing the company to raise billing rates. This will support the company’s infrastructural plans and increased demand for electric vehicles (EVs), artificial intelligence (AI), and data centers. The CPUC’s approval of net billing tariffs and higher customer payments will also support the company’s growth prospects.

PG&E Corporation’s (NYSE:PCG) stock is slightly undervalued with a forward P/E ratio of 14.51, a 19.29% discount compared to the sector median of 17.97. The company’s earnings are projected to increase by almost 10% in the current year. Industry analysts have reached a consensus on the stock’s Buy rating, with an average target price of $22.13 that suggests a 14.33% upside potential from its current levels.