Public Service Enterprise Group (PEG) reported 24Q4 operating revenues of $2.46 billion, down 5.4% from 23Q4. Diluted GAAP EPS was $0.57 vs. $1.09 last year. 24Q4 operating income fell 35.7%, as the company last year booked mark-to-market gains on derivatives that did not repeat this year. It also benefited from gains last year on its Nuclear Decommission Trust investments which reversed to a modest loss this year. Excluding those exceptional items, non-GAAP operating EPS was $0.84 vs. $0.54 in 23Q4 and slightly above my 24Q4 estimate of $0.83.
Management initiated 2025 non-GAAP operating EPS guidance of $3.94 to $4.06, which at the midpoint of $4.00 represents a 9% increase over 2024 non-GAAP EPS of $3.68. The expected improvement is well above the company’s long-term operating earnings growth target of 5%-7%. This year, the stars are apparently aligning for PSEG, as it benefits from a full year of higher distribution base rates, returns on infrastructure modernization and energy efficiency expenditures and a higher base rate at PSE&G, which will be partially offset by the end of the New Jersey ZEC II nuclear subsidy, a planned refueling outage in the fall at its Hope Creek nuclear plant and higher maintenance, interest and depreciation costs.
Based upon the updated guidance, I am now projecting 2025 revenues of $10.89 billion, up 5.8% vs. 2024, GAAP EPS of $4.36 and non-GAAP EPS of $4.00. For 2026, my projections show revenues of $11.07 billion, up 1.6%, GAAP EPS of $4.56 and non-GAAP EPS of $4.20. My 2026 non-GAAP estimate implies earnings growth of 5.0%.
Since my last report (8/5), the stock is down 3.3%, better than the S&P 500’s 4.5% decline, but modestly worse than the DJUA’s 0.2% decline. It peaked above $95 near the end of November and has underperformed the DJUA steadily since. It has been in a modest, but clearly defined downtrend since the November peak, though it has shown signs of stabilizing over the past few weeks.
Based upon the recent trading pattern, I am maintaining my price target of $86, which equates to one year forward multiples of 18.8 times projected 2026 GAAP EPS of $4.56 and 20.5 times projected 2026 non-GAAP EPS of $4.20. The non-GAAP valuation multiple is equal to the stock’s current one-year forward multiple and modestly above the current peer group’s one-year forward multiple of 18.3 times. The $86 price target represents a potential total return of 9.2% from the current price of $81.03, including the stock’s 3.1% dividend yield. I am therefore maintaining my performance rating of “3” (Neutral).
This is a summary of Lark Research’s recent report on Public Service Enterprise Group (PEG). To obtain a copy of the report, please reach out to Steve Percoco using the contact information provided below.
June 20, 2025 (Report published on April 26, 2025.)
Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com
© 2015-2025 by Stephen P. Percoco, Lark Research. All rights reserved.
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