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PEG Maintains Its Guidance despite an Earnings Fall in 1Q16

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Outlook

Public Service Enterprise Group’s (PEG) management reiterated its fiscal 2016 earnings guidance range of $2.80–$3.00 per share. This guidance assumes normal weather conditions during the year. Unfavorable weather conditions could drag Public Service Enterprise’s earnings in the coming quarters like it did in 1Q16. The company’s upcoming earnings might rely heavily on its capital spending. It consistently increased its investment in the last few quarters. This drove the earnings and might continue to do so. Management is expecting Public Service Enterprise’s rate base to expand by 10% compounded annually through 2018.

Let’s see how brokers look at Public Service Enterprise in the next year.

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Price targets

According to Wall Street analysts’ estimates, Public Service Enterprise has an estimated upside of 1% in the next year. It has a price target of $46.66. Currently, it’s trading at $46.13.

Of the 19 analysts tracking Public Service Enterprise, 13 analysts recommended it as a “hold” while four analysts have a “buy” rating. Two analysts recommended it as a “sell” as of May 2, 2016.

Other utilities (JXI) like FirstEnergy (FE) has a one-year price target of $35.3. This indicates a possible upside of 8% with its current market price of $32.6. Exelon (EXC) has a one-year price target of $36.5. This implies an upside of ~4% with its market price of $35.0. Entergy (ETR) has a possible gain of 3% in one year with a price target of $77.3. It’s trading at $75.2 as of May 2, 2016.

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