Public Service Enterprise Group Incorporated (PEG), headquartered in Newark, New Jersey, operates in electric and gas utility business. Valued at $44.6 billion by market cap, the company provide transmission and distribution of electricity and natural gas, as well as supplies energy that integrates the operations of its merchant nuclear generating assets.
Shares of this regulated infrastructure company have outperformed the broader market considerably over the past year. PEG has gained 41.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.1%. In 2024, PEG stock is up 47.3%, surpassing the SPX’s 24.1% rise on a YTD basis.
Zooming in further, PEG’s outperformance is also apparent compared to the Utilities Select Sector SPDR Fund (XLU). The exchange-traded fund has gained about 29.2% over the past year. Moreover, PEG’s returns on a YTD basis outshine the ETF’s 27% gains over the same time frame.
PEG's strong performance can be attributed to the approval and implementation of the PSE&G distribution base rate case settlement, as well as the expansion and extension of its energy efficiency programs.
On Nov. 4, PEG shares closed down more than 6% after reporting its Q3 results. Its adjusted EPS of $0.90 missed Wall Street expectations of $0.91. The company’s revenue was $2.6 billion, topping Wall Street forecasts of $2.5 billion. PEG expects full-year adjusted EPS to be between $3.64 and $3.68.
For the current fiscal year, ending in December, analysts expect PEG’s EPS to grow 5.2% to $3.66 on a diluted basis. The company’s earnings surprise history is disappointing. It missed the consensus estimate in three of the last four quarters while beating the forecast on another occasion.
Among the 20 analysts covering PEG stock, the consensus is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.”
The configuration has been fairly consistent over the past three months.
On Nov. 11, RBC Capital analyst Shelby Tucker maintained a “Buy” rating on PEG with a price target of $92, implying a potential upside of 2.1% from current levels.
The mean price target of $90.41 represents a marginal premium to PEG’s current price levels. The Street-high price target of $102 suggests an upside potential of 13.2%.
