PG&E, Algonquin Power and Avista Are Drawing New Analyst Interest in the Utility Sector

Wall Street is turning constructive on the utility sector, and three names are drawing the clearest signals right now. UBS upgraded PG&E to Buy, Raymond James upgraded Algonquin Power to Outperform, and Barclays initiated Avista with a neutral stance, each call reflecting a distinct thesis on risk, recovery, and valuation.

PG&E: UBS Sees Meaningful Re-Rating Ahead

PG&E Corp (NYSE:PCG | PCG Price Prediction) received a UBS upgrade to Buy from Neutral, with a price target raised to $23 from $20. The core thesis: improvements in California wildfire policy and affordability should drive upside, with phase two legislation ahead of the July 2 recess potentially reducing PG&E’s utility liability. UBS expects the stock’s 43% price-to-earnings discount to narrow “meaningfully” with continued risk reduction.

The data supports a forward-looking case. PG&E’s data center pipeline stands at 3.6 GW in final engineering, up from 1.6 GW in Q3 2025, representing a significant load growth catalyst. Management guided for 2026 non-GAAP core EPS of $1.64 to $1.66, with a $73 billion five-year capital plan requiring no new common equity. The stock trades at $18.05, still roughly 22% below UBS’s target, and is up 13.13% year to date. The consensus analyst target sits at $22.20, with 13 analysts rating the stock Buy or Strong Buy against just 4 Holds and zero Sells — a firmly bullish alignment. The forward P/E of 11x relative to a 9%+ annual EPS growth target through 2030 is the gap UBS believes the market will eventually close.

Algonquin Power: Raymond James Calls the Pullback Overdone

Algonquin Power & Utilities (NYSE:AQN) was upgraded by Raymond James to Outperform from Market Perform, with a price target raised to $7.25 from $6.50. The firm’s view: the share pullback following the revision of 2027 EPS guidance is overdone, and with cost discipline taking hold and continued constructive outcomes across key rate cases, Algonquin remains on track to strengthen its core regulated utility business.

The stock dropped 12.89% in the week ending March 6 following Q4 results that missed adjusted EPS estimates by 45.45% — though that miss was largely structural, driven by the completed sale of its non-hydro renewables business. The underlying regulated business told a different story: the Regulated Services Group posted net earnings of $73.6 million in Q4, up 22% year over year. Algonquin reaffirmed its 2026 adjusted EPS guidance of $0.35 to $0.37 and expects no equity issuance through 2027. At $6.09, the stock sits below both Raymond James’s target and the consensus analyst target of $6.78.

Avista: Barclays Initiates With a Balanced View

Avista Corporation (NYSE:AVA) received a more measured reception. Barclays initiated coverage with an Equal Weight rating and a $40 price target, concluding that the company’s “below-average” earnings growth profile, pending Washington rate case risk, wildfire exposure, power cost volatility, and non-regulated business risk are appropriately reflected in the stock’s discounted valuation.

Avista trades at $38.92, just below Barclays’ target and roughly in line with the consensus of $40.40. The company raised its annual dividend to $1.97 per share and guided for 2026 non-GAAP utility EPS of $2.52 to $2.72. The analyst breakdown reflects the neutral sentiment: 1 Buy, 4 Holds, and 1 Strong Sell.

The Macro Backdrop Is Helping

The 10-year Treasury yield has pulled back from its 12-month high of 4.58% in May 2025 to 4.13% as of March 5, sitting in the lower quartile of its 12-month range. For rate-sensitive utilities, that shift matters — lower yields reduce the discount rate in valuation models and improve the relative appeal of dividend income. All three of these analyst calls landed in an environment that is becoming incrementally more favorable for the sector, which likely contributed to the timing of each firm’s move.