Public Service Enterprise Group Incorporated
A rate-base compounder priced near fair value while New Jersey politics resets the risk

Research date: 31 October 2026. Company: Public Service Enterprise Group Incorporated (PSEG). Listing: NYSE, PEG. CIK 0000788784, ISIN US7445731067. Reporting currency: USD (US GAAP). Latest financial period reviewed: quarter ended 30 June 2026 (10-Q filed 4 August 2026). Material announcements reviewed through 31 October 2026. Capture window 31 October 2026 14:40 to 15:10 Europe/Luxembourg.

Tags used throughout: confirmed = company filing, release or primary source; est. = our arithmetic from confirmed inputs; speculated = sell-side, aggregator, press or assumption. Every figure carries the source's own date; market and broker rows carry the capture timestamp as well.

Idea origination: why this company is on the research list

PEG entered the coverage queue as a large, regulated US utility with a merchant nuclear fleet, a different risk profile from the photonics and AI-infrastructure names in this section. The question is not whether the business survives but whether 6% to 8% earnings growth still holds after New Jersey's new governor made electricity bills the central political issue of 2026, and what the nuclear fleet is worth in a data-center power market. This is research, not a recommendation.

Investment memo: our current view

Fairly priced compounder, with a political overhang the price already partly carries. PSEG is about three quarters a New Jersey wires-and-pipes utility (PSE&G, rate base about USD 36B at end 2025, confirmed) and one quarter a nuclear generator (PSEG Power, 3,758 MW across Salem, Hope Creek and a share of Peach Bottom, confirmed). Management guides USD 4.28 to 4.40 non-GAAP operating EPS for 2026 (confirmed, held in February, May and August), 6% to 8% annual growth through 2030 and a USD 24 to 28B five-year capital plan funded without new equity or asset sales (confirmed, Q2 release 4 Aug 2026). First-half 2026 operating EPS rose 9.5% to USD 2.41 (confirmed).

What changed in the second half of 2026 is the political frame. Governor Sherrill's January 2026 executive orders directed the BPU to mitigate electric rate increases through state funding and (Executive Order No. 1) to study a new utility business model (confirmed, 10-Q); electric rates were held flat for 2026 (confirmed, Q1 release 5 May 2026); a June 2026 New Jersey law mandating RTO membership could cost the 50 basis point transmission ROE adder, about USD 40M of annual net income or about USD 0.08 a share (confirmed USD 40M, 10-Q; per-share est.); and the July 2026 Data Center Fair Share Act requires a separate rate class for large data centers (confirmed, 10-Q). PSE&G anticipates filing to update base rates by year end 2026 (confirmed, 10-Q); that this is years ahead of a 2029 settlement deadline is speculated (preview article 26 Oct 2026). Eleven of twelve broker actions between 30 September and 27 October 2026 cut targets (MarketBeat, captured 31 Oct 15:00).

At USD 74.29 (30 October 2026 close) PEG trades at 17.1x the 2026 guidance midpoint and 16.0x our 2027 base EPS, with a 3.6% dividend yield (est.). Our scenario values are USD 62.9 bust, 76.6 base, 91.0 boom. The consensus target is USD 80 (20 analysts, 8 Buy, 12 Hold; MarketBeat, captured 31 Oct 2026). Morningstar's fair value could not be retrieved from the web and is pending the IBKR capture. The average of the available fair values (consensus and ours) is USD 78.3, 5.4% above the price.

The next hard test is the Q3 2026 report on Monday 2 November 2026 (before the open, call 11:00 ET): Q3 operating EPS against the USD 1.22 consensus (USD 1.13 a year earlier), whether the 2026 range is narrowed to its upper half, the rate case filing date and requested ROE, and any multi-year nuclear contract.

Thesis underwriting: from source idea to investable conclusion

Listing and timestamps

What the business actually sells

The nuclear plants' New Jersey zero emission certificates ended on 1 June 2025; the plants now rely on PJM energy and capacity prices plus the federal nuclear production tax credit, which sets a price floor from 2024 through 2032 (confirmed, 10-Q). Useful lives were extended from April 2025 on the expectation of 20-year licence renewals (confirmed, 10-Q).

Where the earnings sit: one customer account and the money that reaches PSEG

The cutaway runs from the New Jersey ratepayer to the allowed return on equity, which is what PSEG actually earns. The reference unit for the money ladder is one customer account for one year.

The closing comparison: each extra USD 1B of rate base adds about USD 50M of earnings, or about USD 0.10 a share (est., 1B x 55% x 9.6% / 498M). The plan adds roughly USD 12 to 16B of rate base by 2030 (est., 36B grown at 6% to 7.5%), which is where 6% to 8% EPS growth comes from.

The financial starting point

The gap between GAAP and operating EPS comes from nuclear decommissioning trust and mark-to-market swings, which management excludes (confirmed, Q2 release). In Q2 2026 those items cut GAAP EPS by USD 0.19.

Where PSEG stands today: inputs reused in the sections below

• Price USD 74.29 (30 Oct 2026), 498.4M shares, market cap about USD 37.0B (est.).
• Net debt about USD 24.3B (23,591 + 950 - 192), enterprise value about USD 61.4B (est.), before pension and other liabilities.
• 2026 EPS midpoint 4.34; base 2027 EPS 4.64 (est.).
• Dividend 2.68, payout about 62% of the midpoint (est.).

Competitors and market share (31 October 2026)

A regulated utility has no share to lose inside its franchise; the competition is for capital, ROE and political goodwill, and on the nuclear side for PJM power prices.

Peer trailing and forward multiples were not captured in this pass (open item). PJM's capacity price for 2028/29 was about USD 325 per MW-day (speculated, preview 26 Oct 2026), the input that sets PSEG Power's capacity revenue.

Addressable market under two anchors

• Utility anchor: the market is the rate base itself, USD 36B growing to about USD 48 to 52B by 2030 (est., 6% to 7.5% CAGR, confirmed range).
• Load anchor: large-load inquiries of about 11.5 to 11.8 GW with about 20% conversion (speculated, preview) imply about 2.3 GW of new load; at about USD 1M of network investment per MW (assumption, speculated) that is about USD 2.3B of rate base, already largely inside the plan's high end.
• Nuclear anchor: about 30 TWh a year (est., 3,758 MW x 8,760 h x 92%). Each USD 10/MWh of contracted premium over market is about USD 300M pre-tax, about USD 0.45 a share after a 25% tax rate (est.).

Scenarios: 2027 and 2030 earnings under bust, base and boom (31 October 2026)

The single driver of the boom case is a multi-year nuclear contract at a premium to market. The capacity ceiling is physical: the fleet already runs at 92% to 94% capacity factor, so upside comes from price, not volume. Implied 2025 to 2030 EPS CAGR: bust 5%, base 7%, boom 9.6% (est.).

Valuation: market data and scenario values as of 31 October 2026

Broker actions in the last month (MarketBeat, captured 31 Oct 2026 15:00)

Dilution history

No common equity has been issued under the plan; diluted average shares were 500M in 2024, 501M in 2025 and 499M in H1 2026 (confirmed, releases). Shares outstanding fell from 499.2M (21 Oct 2025) to 498.4M (20 Jul 2026) (confirmed, XBRL dei). Management repeats that the USD 24 to 28B plan needs no new equity (confirmed, Q2 release).

Our base-case value, arithmetic shown

2026 guidance midpoint USD 4.34 x 1.07 (midpoint of the 6% to 8% growth target) = USD 4.64 2027 EPS. A 16.5x forward multiple (a discount to the 17x to 18x the stock carried before the 2026 political reset, our assumption) gives 4.64 x 16.5 = USD 76.6. We treat it as a value one year out without further discounting, because the 3.6% dividend roughly offsets a regulated-utility cost of equity a little above the earnings yield.

Fair value average for the price chart

Mean of the inputs available: consensus USD 80.0 and ours USD 76.6 = USD 78.3; Morningstar is missing. The price is 5.4% below the average, so the meter reads green, by a thin margin.

IBKR ratings

Fair value update (31 Oct 2026, after this capture): the average shown on the price chart is now USD 77.67, 4.5% above the 2026-10-30 close of 74.29 (green). Inputs: Morningstar fair value via IBKR Mobile (Analyst Equity Report; 3 stars, moat Narrow, uncertainty Low) 75.0 (2026-05-07); LSEG (Refinitiv) consensus target, 24 analysts, via IBKR Mobile 81.42 (2026-10-31); The Claude Trader base case 76.6 (2026-10-31). Where an earlier section quotes a different average, this one is current.

Captured 2026-10-31 15:43 to 15:44 Europe/Luxembourg from IBKR Mobile (read-only). Full table with screenshots: ibkr/ibkr_peg_2026-10-31.md.

Latest IBKR news: - 30 Oct 2026 Seeking Alpha: Public Service Q3 earnings preview - 30 Oct 2026 Morningstar Advisor: PEG stock report - 29 Oct 2026 Zacks: Xcel Energy Q3 beats (tags PEG, XEL) - 28 Oct 2026 IB Market Signals: PEG price spike down, last 72.28, -0.54 (-0.74%)

Leadership and governance (31 October 2026)

Who runs it

The CEO is a hired insider, not a founder; PSEG is widely held with no controlling shareholder.

Promises versus delivery, last four reports

Revenue quality, adapted for a regulated utility

The NRE test does not apply. The equivalent is how much of earnings is regulated and recovered on time: 76% of H1 2026 operating earnings were regulated (confirmed). Much of PSE&G's capital is recovered through clause mechanisms (GSMP, CEF, CIP petitions listed in the 10-Q), which lowers lag; the early base rate case suggests lag is rising on the rest (speculated). Power earnings depend on PJM prices above the PTC floor.

Insider register (Form 4, EDGAR; captured 31 Oct 2026 14:52)

The CEO sells a fixed 2,083 shares on the first trading day of each month, consistent with a 10b5-1 plan (est.; plan not read), about USD 150k each. No open-market insider buys were found in the filings checked.

Red flags

• No restatement, auditor change or late filing in the EDGAR filings reviewed.
• Political risk is the main flag: executive orders on rate mitigation and a utility business-model study, flat 2026 rates, transmission ROE adder in question, an early rate case.
• GAAP earnings swing with trust and mark-to-market items: Q2 2026 GAAP EPS fell 43% while operating EPS rose 12%.
• The price fell from the USD 87.63 52-week high to a USD 66.15 low and sits below its roughly USD 78 200-day average (speculated, preview).

Next dated hard test

Q3 2026 results, Monday 2 November 2026, before the open; call 11:00 ET. Watch Q3 operating EPS against the USD 1.22 consensus, the 2026 range, the rate case filing date and ask, any nuclear contract, and capital plan updates.

Fact audit: checks made on 31 October 2026

An independent adversarial audit (template step 2) ran on 31 October 2026; see Fact-audit notes below.

Fact-audit notes (independent audit, 31 October 2026)

Every figure in this report, METADATA.json, FAIR_VALUE.json and the diagrams was rechecked against the Q2 2026 10-Q, the Q2 2026 and Q4 2025 releases, XBRL company facts, the Yahoo chart API file and MarketBeat (refetched 31 Oct 2026). All EPS, revenue, balance sheet, rate base, capex plan, dividend, nuclear output, share count and price figures matched; all derived ratios (market cap, EV, P/E, yield, payout, P/B, scenario values, fair value average 78.3 and 5.4% gap) recompute correctly.

What is still open

• Morningstar fair value, stars and moat (pending IBKR capture).
• LSEG or TipRanks consensus target to replace the MarketBeat aggregate.
• Peer multiples (Exelon, FirstEnergy, Constellation, Con Ed, PPL).
• Allowed ROE and equity layer from the 2024 rate settlement (assumed 9.6% and 55% here).
• Proxy read for CEO pay and tenure dates.

Checkpoints that can change the view

• 2 Nov 2026: Q3 results and guidance.
• By end 2026: base rate case filing (ask, ROE, test year).
• Any multi-year nuclear contract announcement.
• BPU and FERC rulings on the transmission ROE adder.
• February 2027: 2027 guidance and dividend decision.

Information dates and future updates

Section source dates are in UPDATES.json. Review after 2 November 2026.