Public Service Enterprise Group (PEG): Strong Market Performance Despite Q3 Shortfall
Public Service Enterprise Group Incorporated (PEG), based in Newark, New Jersey, is a major player in the electric and gas utility sector. With a market capitalization of $44.6 billion, PEG is involved in the transmission and distribution of electricity and natural gas, alongside managing its merchant nuclear generating operations.
Robust Growth Outpaces Major Indices
This regulated infrastructure firm has shown remarkable growth compared to broader market trends. Over the last year, PEG shares have surged by 41.3%, significantly outperforming the S&P 500 Index ($SPX), which has gained nearly 31.1%. In 2024 thus far, PEG stock has risen by 47.3%, in contrast to the SPX’s 24.1% increase year-to-date (YTD).
Strong Returns Compared to Sector Peers
When looking closely, PEG’s performance stands out even against the Utilities Select Sector SPDR Fund (XLU), which has seen a 29.2% increase over the past year. Additionally, PEG’s YTD returns surpass the ETF’s 27% rise for the same period.
Factors Behind PEG’s Strong Performance
The company’s impressive performance can be linked to the approval and start of the PSE&G distribution base rate case settlement, along with the growth and continuation of its energy efficiency initiatives.
Q3 Results Highlight Mixed Performance
On November 4, PEG’s shares declined over 6% following the release of its Q3 results. Its adjusted earnings per share (EPS) stood at $0.90, slightly below analysts’ expectations of $0.91. However, PEG’s revenue reached $2.6 billion, beating forecasts of $2.5 billion. The company projects its full-year adjusted EPS to be between $3.64 and $3.68.
Analysts Outlook for PEG
For the current fiscal year, ending December, analysts predict a 5.2% growth in PEG’s EPS, estimating it will rise to $3.66 on a diluted basis. However, PEG’s track record has been less than stellar, missing consensus estimates in three of the last four quarters, although it did surpass expectations on one occasion.
Mixed Ratings from Analysts
Among the 20 analysts monitoring PEG stock, the overall consensus rates it as a “Moderate Buy.” This assessment includes ten “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.”
Future Price Targets
Recently, RBC Capital analyst Shelby Tucker reaffirmed a “Buy” rating for PEG, setting a price target of $92, suggesting a potential increase of 2.1% from current price levels. The average price target stands at $90.41, offering a slight premium, while the highest target of $102 indicates a possible upside of 13.2%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
