EIX Maintained by Jefferies -- Price Target Lowered to $53.00

PG&E (PCG) and Edison International (EIX) shares fell over 20% after California's wildfire legislation failed to provide expected financial protections. Analysts downgraded both stocks, citing exposure to wildfire liabilities. PCG hit a 52-week low, while EIX saw its biggest single-day drop in 25 years. BMO, Mizuho, and Wells Fargo lowered price targets and ratings for both companies.

Morningstar upgraded five US-listed stocks to 5-star ratings, indicating undervaluation. The stocks are PG&E (PCG), Edison International (EIX), Aurora Innovation (AUR), Pentair (PNR), and PVH (PVH). PG&E and Edison saw significant weekly declines, while Aurora rose. All trade below their fair value estimates, with discounts ranging from 30% to 47%.

PG&E (PCG) and Edison (EIX) shares fell after California lawmakers introduced a bill without liability protection for utilities. Analysts downgraded both stocks, and PG&E cut its 2027 capital investment plan by $2 billion. PG&E reaffirmed its FY 2026 earnings guidance and initiated FY 2027 guidance. Both companies face significant wildfire liability risks, with PG&E potentially covering 48% of the state's wildfire liability fund.

Dell Technologies shares rose to all-time highs after strong Q2 earnings and raised full-year guidance. Uber announced 3,300 job cuts to focus on robotaxi development. Broadcom shares fell despite strong earnings due to lower-than-expected Q4 revenue guidance. Robinhood Markets gained after bullish analyst notes. Edison International and PG&E fell over 20% due to wildfire-related legislation.

California scrapped a wildfire liability overhaul, leaving utility credit ratings at risk. PG&E and Southern California Edison bonds and stocks were affected, with S&P warning of potential downgrades. The original proposal included a liability cap and was seen as credit supportive, but the revised bill was deemed insufficient. The issue will be left to the next governor, with Moody's warning of higher electricity rates and economic competitiveness challenges.

Edison International (EIX) shares dropped 6.14% on Wednesday after JPMorgan analyst Aidan Kelly cut his price target to $61 from $82, citing regulatory setbacks. The California legislature did not vote on the Wildfire Liability Bill, leaving Edison's subsidiary, Southern California Edison, exposed to lawsuits over the Eaton fire. Kelly maintained a neutral rating.