Hedge Fund Giant Dan Loeb's PG&E Bet Beats Market

Billionaire Dan Loeb stands out as one of Wall Street's most influential hedge fund managers. As the founder of Third Point, a hedge fund managing $7 billion in assets, Loeb has built a reputation for employing aggressive activist strategies that push for significant changes within companies worldwide.

As we step into 2025, let’s see how Loeb’s top stock holdings have performed in the last six months (June-December 2024).

As of November 2024, Dan Loeb’s top holdings constituted 49.7 million shares in Pacific Gas & Electric Co. PCG and 11.8 million shares in Bath & Body Works, Inc. BBWI.

PCG: In the second half of 2024, PCG shares surged around 17.12%, compared to the S&P 500, which experienced a growth of 5.65%.

Some recent major events of the company are as follows.

• On Dec. 2, PCG reaffirmed its 2024 adjusted EPS guidance of $1.34-$1.37, in line with the consensus of $1.36, and its 2025 adjusted EPS outlook of $1.47 to $1.51, vs. an estimate of $1.49.
• On Nov. 13, the company partnered with Itron to enhance the accessibility and affordability of electric vehicle (EV) charging for PG&E customers.
• On Nov. 7, the company reported a third-quarter adjusted EPS of 37 cents, exceeding analysts’ expectations of 33 cents, but revenue of $5.94 billion, falling short of the consensus estimate of $6.61 billion.
• During the earnings call, PCG also raised its five-year capital investment plan by $1 billion, bringing the total to $63 billion for the 2024-2028 period. The additional capital has already been funded through the recent issuance of junior subordinated notes. The company also reaffirmed its equity issuance guidance of $3 billion for 2025-2028.

PG&E shines with its 10% EPS growth outlook and clear runway for financing, thanks to a recent equity raise.

On Dec. 17, JPMorgan analysts Jeremy Tonet and Richard W. Sunderland stated that they believe PG&E’s wildfire mitigation investments, data center pipeline and re-rating potential could drive substantial gains. Updates on its system investment needs in the fourth quarter are likely to serve as pivotal catalysts for growth in 2025 and beyond.

BBWI: On the other hand, BBWI shares have escalated 4.81% compared to the S&P 500, which has grown 5.65% in the last six months.

Major recent events of the company are:

• On Nov. 25, the company reported third-quarter adjusted earnings of 49 cents per share, surpassing the consensus estimate of 47 cents. Quarterly sales reached $1.61 billion, exceeding analysts’ expectations of $1.58 billion.
• During the earnings call, the company said it expects fourth-quarter net sales to decline of 6.5% to a decline of 4.5% year-over-year, reflecting a 500-basis-point headwind from a shifted fiscal calendar. Earnings per share are expected to be between $1.94 and $2.07, versus the $1.98 consensus.
• Moreover, BBWI raised fiscal 2024 guidance, expecting net sales to decline 2.5% – 1.7% (prior view: decline of 4% – 2%). Adjusted earnings per share are projected at $3.15 – $3.28 (prior view $3.06 – $3.26) versus the $3.18 consensus.

On Dec. 24, Telsey Advisory Group analyst Dana Telsey named Bath & Body Works as a stock with potential following its earnings and revenue beat-and-raise report for the third quarter. It also sees the store as a “holiday winner” with its strong gift assortment.

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Image created using artificial intelligence via Midjourney.