Monday, September 13, 2010

FBR Capital (Nasdaq:FBCM) Maintains Rating on Pacific Gas (NYSE:PCG)

Saying liabilities and loss of equity capitalization is probably reflected in the stock price, FBR Capital (Nasdaq:FBCM) said it is maintaining its "Outperform/Top Pick" rating on Pacific Gas & Electric Co. (NYSE:PCG).

PG&E has liability insurance of $992 million, which most think should cover all costs, although there are concerns it could go above that by the company.

FBR said, "Our first blush reaction is that the equity market capitalization lost exceeds the likely monetary impact to shareholders. According to preliminary reports, 38 homes were destroyed, seven were significantly damaged, and as many as 6 people lost their lives. This may total to about $100 million in damages using very rough math. Additional costs from litigation, fines levied, emergency response costs, pipeline and other infrastructure repairs, are likely to increase this amount substantially."

Four people actually have lost their lives, with three being in critical condition and who may not make it.

PG&E lost over $1 billion in market cap on Friday, plummeting $4.03, or 8.35 percent, to close at $44.21.

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