New Jersey-based Public Service Enterprise Group Incorporated (PEG) operates in the electric and gas utility business in the United States. Valued at a market cap of $42.6 billion, the company principally operates through two key subsidiaries, which are PSEG Power LLC and Public Service Electric and Gas Company (PSE&G).
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and PEG fits the label perfectly. The electric services company is known for its work in clean energy, nuclear power, and energy distribution and transmission, and as of December 31, 2023, the company had an electric transmission and distribution system of 25,000 circuit miles and 866,600 poles.
PEG has declined 9.7% from its 52-week high of $95.22, achieved on Nov. 27. Shares of PEG have gained 3.2% over the past three months, lagging behind the broader Nasdaq Composite’s ($NASX) 13.3% increase over the same time frame.
Nonetheless, in the longer term, PEG has rallied 37.4% over the past 52 weeks, outperforming NASX’s almost 37% returns. Moreover, shares of PEG are up 40.6% on a YTD basis, surpassing NASX’s 32.6% gains over the same time frame.
To confirm its recent bearish trend, PEG has been trading below its 50-day moving average since early December. However, it has remained above its 200-day moving average since late February.
On Nov. 4, shares of PEG plunged 6.2% following its mixed Q3 earnings results. The company’s adjusted EPS improved 5.9% year-over-year to $0.90 but slightly missed the consensus estimates by 1.1%. However, its revenue of $2.6 billion increased 7.6% from the year-ago figure and exceeded the forecasted figure of $2.5 billion. The company’s 5% annual increase in operating expense to $2 billion, 22.7% year-over-year increase in interest expenses, and a 5.5% yearly decline in the PSE&G segment’s net income to $379 million might have further dampened investor confidence.
Yet, PEG has outperformed its rival, Duke Energy Corporation (DUK), which gained 14.5% over the past 52 weeks and 12.5% on a YTD basis.
Despite PEG’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 20 analysts covering it, and the mean price target of $90.29 suggests a modest 5% premium to its current levels.
