Public Service Enterprise Group Incorporated

Based on the provided analysis, here is an assessment of Public Service Enterprise Group (PEG).

Technical Analysis PEG exhibits strong positive momentum, outperforming the market over the past three months. It has recovered significantly from its 52-week low and is trading comfortably within the upper half of its yearly range. The stock appears to be in a technically healthy position without showing signs of being overbought.

Fundamental Analysis The company demonstrates robust revenue growth and strong profitability, with operating margins exceeding 26%. Its financial health is reasonable, supported by manageable debt levels and adequate interest coverage. While operational metrics like ROE are modest, this is typical for a capital-intensive utility, and its cash generation remains solid.

Valuation & Risk Valuation presents the main area of caution. While the forward P/E suggests earnings growth, the high PEG and EV/EBITDA ratios indicate the stock may be trading at a premium. The risk profile is favorable, characterized by low volatility and no short interest, which reduces downside pressure from speculative activity.

Buy Recommendation PEG is a high-quality utility stock with strong fundamentals, positive momentum, and a lower-risk profile. However, its current valuation appears full, potentially limiting near-term upside. For investors seeking a stable, defensive holding, PEG is a worthwhile candidate, but entry at current levels should be considered with the understanding that its premium valuation may cap returns. This is not investment advice, for reference only.

RockFlow Model Forecast: Three Scenarios for 2026

Based on a 12-month outlook for Public Service Enterprise Group (PEG), the stock is expected to demonstrate stable, moderate growth driven by its predictable utility business model and investments in infrastructure and renewable energy. Key catalysts include continued execution of its capital expenditure plan focused on grid modernization and clean energy transition, which should support steady earnings growth. The primary risk remains its current valuation; while the company's fundamentals are strong, its premium pricing may limit significant upward momentum, especially if interest rates remain elevated and pressure utility sector multiples. Considering the absence of a specific analyst target and the full valuation, a reasonable target price range is anticipated to be in the mid-$90s, implying modest upside from the current price of $86.95.

Wall Street Consensus

Most Wall Street analysts are optimistic about Public Service Enterprise Group Incorporated's 12-month outlook, with consensus target around $85.68, indicating expected upside potential.

Overall, PEG has investment potential but also faces challenges. Here are key factors to weigh before investing.

PEG has demonstrated strong recent momentum with solid absolute returns and market outperformance over the past quarter. The stock shows resilience with moderate volatility and has recovered significantly from its 52-week low.

Short-term performance is robust, with a 9.5% surge over one month contributing significantly to the 3.82% three-month gain. PEG has notably outperformed the market by 3.84% over this period, indicating strong relative strength despite its lower beta characteristic.

Currently trading at $86.95, PEG sits comfortably in the upper half of its 52-week range ($74.67-$91.26), approximately 72% from trough to peak. The stock appears fairly valued given its recent recovery from the -14.1% maximum drawdown, showing neither extreme overbought nor oversold conditions.

Revenue & Profitability: PEG's Q3 2025 revenue grew to $3.23 billion from $2.81 billion in Q2, demonstrating strong top-line expansion. Profitability remains robust with a net income margin of 19.3%, despite a slight decline from the previous quarter's 20.9%, indicating effective cost management relative to revenue growth. Operating income margins above 26% reflect solid operational control.

Financial Health: The company shows moderate leverage with a debt-to-equity ratio of 1.38 and debt ratio of 41.3%, indicating manageable debt levels. However, liquidity appears constrained with a current ratio below 1.0, though the interest coverage ratio of 3.38 provides adequate protection for interest obligations.

Operational Efficiency: PEG's operational efficiency is mixed, with a modest ROE of 3.7% and low asset turnover of 0.057, typical for capital-intensive utilities. The cash conversion cycle of 58 days and operating cash flow to sales ratio of 32.5% demonstrate reasonable working capital management and cash generation capabilities relative to industry standards.

Based on PEG's PE ratio of 20.85 (TTM), the stock appears moderately valued relative to the broader market. However, the forward PE of 16.74 suggests expectations for earnings growth. The high PEG ratio of 2.45 indicates the stock is potentially overvalued when growth is considered, and the elevated EV/EBITDA of 50.48 further signals a premium valuation relative to its operating cash flow.

A peer comparison cannot be meaningfully conducted as industry average data is not available. This lack of a benchmark prevents an assessment of whether PEG's valuation multiples represent a premium or discount to its sector peers. Analysis would be significantly strengthened by having the relevant industry comparisons for context.

Volatility Risk: PEG exhibits low volatility risk, with a beta of 0.616 indicating it is approximately 40% less volatile than the broader market. This is further supported by a manageable one-year maximum drawdown of -14.1%, suggesting historically modest price declines during market downturns.

Other Risks: A notable positive is the apparent absence of short interest, which removes the risk of a short squeeze and indicates minimal speculative betting against the stock. However, the overall risk profile remains subject to macroeconomic factors affecting the utility sector and potential regulatory changes.