NEW YORK (TheStreet) -- Pacific Gas and Electric (PCG) was upgraded by analysts at JPMorgan Chase to "overweight" from "neutral" this morning, with a higher price target of $57 from $50 on shares of the natural gas and electricity company.
Analysts at JPMorgan said regulatory outlook has improved and the company trades at a more reasonable valuation.
The firm now sees the risk/reward scale favoring PG&E shares, "given the regulatory steps forward and adequately priced-in risk for near-term events."
JPMorgan added that it believes the company is well positioned to minimize lag and grow earnings.
San Francisco-based PG&E is a holding company that conducts its business through its primary operating subsidiary in northern and central California.
The company has received regulatory approval to pilot and test new smart grid technologies to provide electric service.
Shares of PG&E closed at $52.07 on Friday.
Separately, TheStreet Ratings team rates PG&E CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PG&E CORP (PCG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.7%. Since the same quarter one year prior, revenues rose by 18.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 375.00% and other important driving factors, this stock has surged by 31.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- 35.45% is the gross profit margin for PG&E CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.48% is above that of the industry average.
- Net operating cash flow has increased to $1,677.00 million or 22.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.66%.
- You can view the full analysis from the report here: PCG Ratings Report