Citi analyst Praful Mehta raised his price target for PG&E to $10.50 from $5 saying the company's settlement with the Official Committee of Tort Claimants likely dealt a "fatal blow" to the bondholder plan and the zero stock price scenario.

The shares closed Tuesday up $1.14 to $12.32.

The bondholder plan's primary leverage was their deal with the Committee of Tort Claimants, Mehta tells investors in a research note. Without that leverage, he sees a "very low likelihood" of Judge Montali rejecting the settlement and keeping the two competing plans alive. The analyst, whose new $10.50 price target is based on the latest settlement, keeps a Sell rating on PG&E.