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How Public Service Enterprise’s Valuation Compares with Peers’

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Public Service Enterprise

Public Service Enterprise (PEG), valued at $28.2 billion, is a diversified utility that provides electricity and gas to ~4 million customers. It generates a large chunk of its revenue from competitive operations, makes its earnings less stable. PEG stock has risen ~8% this year, while the Utilities Select Sector SPDR ETF (XLU), which represents S&P 500 utilities, has risen ~7%.

PEG

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Valuation

PEG stock’s forward PE ratio is 17x, close to its peers’ average but lower than its five-year historical average of ~19x.

Analysts’ views and target price

Analysts’ median target price of $57.20 for PEG implies a 3% upside based on its current market price of $55.30. Of the 14 analysts covering PEG, three recommend “strong buy,” six recommend “buy,” and five recommend “hold.” None recommend “sell.” UBS raised PEG’s target from $60 to $63 last week.

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