DCF Studio

    PCG · NYQ · Utilities

    PG&E Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD -14.04

    Market price

    USD 13.28

    Implied upside

    -205.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 43.4% of revenue against depreciation of 17.2%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD -14.04-205.7%
    Exit multiple
    USD -1.42-110.7%
    Market price
    USD 13.28

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -4bn-1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 25.9bnUSD 27.0bnUSD 28.0bnUSD 29.1bnUSD 30.1bnUSD 31.1bnUSD 32.1bnUSD 33.0bnUSD 33.9bnUSD 34.7bn+3.3%
    EBITUSD 3.8bnUSD 4.0bnUSD 4.1bnUSD 4.3bnUSD 4.4bnUSD 4.6bnUSD 4.7bnUSD 4.9bnUSD 5.0bnUSD 5.1bn+3.3%
    NOPATUSD 3.0bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bnUSD 4.0bn+3.3%
    Add depreciation & amortisationUSD 4.5bnUSD 4.6bnUSD 4.8bnUSD 5.0bnUSD 5.2bnUSD 5.3bnUSD 5.5bnUSD 5.7bnUSD 5.8bnUSD 6.0bn+3.3%
    Less capital expenditureUSD -11.2bnUSD -11.1bnUSD -10.8bnUSD -10.6bnUSD -10.2bnUSD -9.8bnUSD -9.4bnUSD -8.8bnUSD -8.3bnUSD -7.7bn-4.2%
    Capex, % of revenue43.4%41.1%38.7%36.3%33.9%31.6%29.2%26.8%24.4%22.1%-
    Less increase in working capitalUSD -17.5mUSD -19.8mUSD -19.6mUSD -19.3mUSD -18.9mUSD -18.4mUSD -17.9mUSD -17.2mUSD -16.5mUSD -15.6m-1.3%
    Free cashflow to firmUSD -3.8bnUSD -3.3bnUSD -2.8bnUSD -2.2bnUSD -1.6bnUSD -867.3mUSD -132.6mUSD 647.6mUSD 1.5bnUSD 2.3bn-
    Discount factor0.97140.91660.86490.81620.77010.72670.68570.64700.61060.5761-
    Present valueUSD -3.7bnUSD -3.0bnUSD -2.4bnUSD -1.8bnUSD -1.2bnUSD -630.3mUSD -90.9mUSD 419.0mUSD 897.7mUSD 1.3bn-
    Present Value Of The ForecastUSD -10.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.449Reported 0.177, pulled toward 1.0 (Blume)
    Cost of equity6.79%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a B rating at 1.6x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 5.1%.
    Market capitalisationUSD 39.9bn39.4% of capital
    Total debtUSD 61.3bn60.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC5.98%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD -14.04

    134% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 4.0bn
    Less reinvestment at g/ROIC (41.8% of NOPAT)
    USD -1.7bn
    Capitalised
    USD 2.3bn
    ROIC (WACC floor)
    6.0%
    Terminal value, undiscounted
    USD 69.2bn
    Terminal value, discounted
    USD 39.9bn
    Enterprise value
    USD 29.7bn
    Less net debt
    USD 60.6bn
    Equity value
    USD -30.9bn

    Exit at 10.6x EBITDA

    Value per shareUSD -1.42

    118% of EV

    Terminal value, undiscounted
    USD 117.5bn
    Terminal value, discounted
    USD 67.7bn
    Enterprise value
    USD 57.5bn
    Less net debt
    USD 60.6bn
    Equity value
    USD -3.1bn

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.98%0.39-0.27-0.93-1.59-2.25
    4.98%-7.88-8.38-8.88-9.38-9.87
    5.98%-13.26-13.65-14.04-14.43-14.82
    6.98%-16.98-17.30-17.61-17.93-18.25
    7.98%-19.69-19.95-20.21-20.47-20.73

    Outlined: this model. Green text: above today's price of 13.28. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.8%3.4%13.7%
    EBIT margin19.4%14.7%29.2%
    Discount rate-6.0%3.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.