What happened

Shareholders of beleaguered electric utility PG&E Corporation (NYSE:PCG) got a big break today. With Citigroup upgrading the bankrupt utility stock to "buy," PG&E shares are up 16.1% as of 12:20 p.m. EST -- and climbing.

So what

StreetInsider.com has the details. This morning, Citi upped PG&E stock to "buy" with a $33 price target, implying better than a 100% profit potential off of PG&E's closing share price last week of $15.48.

"Public comments by the Governor [of California] and recent conversations with teams in Sacramento suggest that legislation to limit future wildfire risk could be passed in 60-90 days," observed Citi.

Anticipating this development, Citi has crunched the numbers and concludes that, based on a discounted cash flow analysis, PG&E stock would be worth $66 but for the financial liabilities it faces as a result of its role in allowing wildfires to break out in 2017 and 2018. Citi calculates the likely financial hit from these liabilities at $18 per share, subtracts a further $7 for fines/penalties/bankruptcy costs, and $8 more for future wildfire liabilities.

Check out the latest PG&E earnings call transcript.

Power lines on a high tower

Citi performs a high-wire act as it recommends buying bankrupt PG&E stock. Image source: Getty Images.

Now what

That leaves PG&E stock worth $33 -- if everything works out according to Citi's plan. That being said, Citi cautions investors that it could be wrong about this one, and the stock remains "high risk."

Well, like the saying goes: No risk, no 100% reward.