Valued at a market cap of $41.8 billion, Public Service Enterprise Group Incorporated (PEG) is an electric and gas utility company that has its operations mostly located in the Northeastern and Mid-Atlantic parts of the United States. The Newark, New Jersey-based company operates through two key subsidiaries - Public Service Electric and Gas Company (PSE&G) and PSEG Power LLC.
This utility company’s shares have massively outpaced the broader market over the past 52 weeks. PEG has soared 43.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 20.7%. However, the stock is marginally down on a YTD basis, lagging behind SPX’s 3.2% rise during the same time frame.
Zooming in further, PEG has outperformed the Utilities Select Sector SPDR Fund’s (XLU) 31.7% return over the past 52 weeks but has underperformed XLU’s 4.9% gain on a YTD basis.
On Jan. 27, shares of PEG plunged 6.8% following a downgrade by Barclays from "Overweight" to "Equal Weight." The decline also aligned with the broader market reaction to the emergence of DeepSeek, which prompted investors to reassess electricity demand from AI-driven data centers.
Moreover, on Nov. 4, PEG’s shares dropped 6.2% following its mixed Q3 earnings release. The company’s revenue advanced 7.6% year-over-year to $2.6 billion and topped the Wall Street estimates by a notable margin of 6.5%. However, its adjusted EPS of $0.91, while up 5.9% from the previous year, fell short of expectations by 1.1%. The earnings miss can be primarily attributed to an 8% annual decline in gas sales volume, a 5.5% drop in net income from the company’s key PSE&G segment, and a significant 22.7% year-over-year rise in interest expenses.
For the fiscal year, which ended in December, analysts expect Public Service Enterprise’s EPS to grow 5.5% year over year to $3.67. The company’s earnings surprise history is disappointing. It surpassed the Wall Street estimates in one of the last four quarters while missing on three other occasions.
Among the 20 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on nine “Strong Buy,” one “Moderate Buy,” and 10 “Hold” ratings.
This configuration is slightly less bullish than three months ago, with 10 analysts suggesting a “Strong Buy” rating.
On Jan. 23, Guggenheim maintained a “Buy” rating on PEG and raised its price target to $98, which indicates a 17% potential upside from the current levels.
The mean price target of $91.35 represents a 9% upside from PEG’s current price levels, while the Street-high price target of $102 suggests an upside potential of 21.8%.
