PEG changes
Pick any two versions below to diff them.
- Price
- $71.49 → $74.29(+3.9%)
- Next earnings
- Nov 2, 2026 → Feb 2, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices PSEG as a utility with political risk in New Jersey. Electricity bills in the state rose sharply in June 2025 after high PJM capacity prices. In January 2026, the new governor ordered the Board of Public Utilities (BPU) to limit rate increases and to study changes to the utility business model. In July 2026, the BPU published a consultant study of ratemaking options, and a quantitative analysis of these options is the next step. A June 2026 state law also makes membership in a regional transmission organization mandatory from January 1, 2027. This can remove the 50 basis point return adder of PSE&G and lower its net income by about $40 million a year. The nuclear business adds a second uncertainty, because its earnings move with power prices above the tax credit floor. For the gap to close, PSEG must earn 2026 operating EPS within its $4.28 to $4.40 guidance and keep its outlook of 6% to 8% growth a year through 2030. The BPU review must not lead to a lower allowed return. A multi-year contract for nuclear output, which management is working on, would also make earnings more certain. removed: PSEG reports added: The Q3 2026 removed: results added: report on November 2, 2026, removed: which is added: kept the added: 2026 guidance and the growth outlook. The next removed: test. added: tests are the start of mandatory RTO membership on January 1, 2027, the Q4 report with the 2027 guidance in about February 2027, and the result of the BPU review during 2027. If these checks pass, the gap can close over the next two to four quarters. The main reason it may not close is a state policy change that cuts the return on utility investment.
- Balance sheet
- Cash: removed: $192M added: $837M Debt: removed: $24.5B added: $25.6B Net debt: removed: $24.3B added: $24.8B Interest cover: removed: 2.8× added: 2.6× Undrawn credit line: removed: $3.2B, added: $3.1B, to March 2031 Debt due within 12 months: removed: $1.8B added: $1.5B PSEG funds PSE&G with first mortgage bonds and funds the parent and PSEG Power with senior notes and commercial paper. At removed: June added: September 30, 2026, total debt was removed: $24.54 added: $25.63 billion: long-term debt of removed: $23.59 added: $24.56 billion, which includes removed: $850 added: $425 million due within one year, and commercial paper and loans of removed: $950 million. added: $1.08 billion. In the first nine months of 2026, PSE&G issued $2.0 billion of secured medium-term notes and retired $875 million, PSEG issued $500 million of senior notes and PSEG Power issued $400 million of senior notes. Cash was removed: only $192 million, which is normal for a utility that uses commercial paper. added: $837 million at September 30, 2026. Credit facilities of removed: $3.8 added: $3.83 billion had removed: $3.2 added: $3.08 billion available, and the main $3.75 billion of them run to March 2031. Interest cover is operating income divided by interest expense for the first removed: half added: nine months of 2026. If PSEG Power lost its investment grade rating, it would have to post about removed: $705 added: $682 million of additional removed: collateral. added: collateral, as of September 30, 2026. PSEG paid a dividend of $0.67 per share each quarter in 2026, up from $0.63. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Nov 2, 2026: Q3 2026 earnings: 2026 guidance. removed: Pending. added: Passed. Watch: Operating EPS on track for the $4.28 to $4.40 guidance and the 6% to 8% growth outlook kept pass; a cut to either fails. added: Outcome: Operating EPS was $3.56 for the first nine months, up from $3.33, and PSEG kept both its 2026 guidance and its 6% to 8% growth outlook. Jan 2027 (estimate): Mandatory RTO membership: transmission return adder. Pending. Watch: PSE&G keeps its 50 basis point adder, or the loss stays near $40 million a year, passes; a larger cut to the transmission return fails. added: Feb 2, 2027 (estimate): added: Q4 2026 results and 2027 guidance. Pending. Watch: 2026 operating EPS within the $4.28 to $4.40 guidance and 2027 guidance in line with 6% to 8% growth pass; a result below the range or lower 2027 guidance fails. 2027 (estimate): BPU review of the utility business model. Pending. Watch: A result that keeps the current return on equity and rate recovery passes; a lower allowed return or new limits on rate recovery fail.
- Recent events
- added: Nov 2, 2026: PSEG reported Q3 2026 results. Net income was $376 million, or $0.76 per share, down from $1.24 a year earlier, mainly because of mark-to-market and trust investment losses. Non-GAAP operating earnings were $1.15 per share, up from $1.13. PSE&G earned $506 million, down from $515 million, because higher depreciation and interest costs that are not yet in rates outweighed its investment growth. PSEG kept its 2026 guidance of $4.28 to $4.40 per share and its 6% to 8% growth outlook through 2030. Its nuclear plants ran at 95.5% of capacity in the quarter. Nov 2, 2026: In its Q3 2026 report, PSEG described new PJM actions. In October 2026, FERC rejected the main parts of a PJM plan to cut power to new large loads, such as data centers, at peak times. At the end of October 2026, PJM filed a revised plan for a one-time purchase of 15-year commitments from new power plants, and it plans the auction for March 1, 2027 if FERC approves the plan. Oct 13, 2026: PSEG said that it will report Q3 2026 results on November 2, 2026. On the same call, management will discuss its guidance, capital investments and regulatory matters. Aug 4, 2026: PSEG reported Q2 2026 results. Net income was $334 million, or $0.67 per share, down from $1.17 a year earlier, mainly because of losses on trust investments and other items. Non-GAAP operating earnings were $0.86 per share, up from $0.77. PSEG kept its 2026 guidance of $4.28 to $4.40 per share and its 6% to 8% growth outlook through 2030. It said it can fund its $24 billion to $28 billion five-year capital plan without new shares or asset sales. Aug 4, 2026: In its Q2 2026 report, PSEG described new state actions. In July 2026, the BPU published a consultant study of options to change how electric distribution utilities earn money. In the same month, the governor signed the Data Center Fair Share Act, which makes the BPU set a separate rate class for large data centers so that they pay the full cost of the grid upgrades that they need. Jul 2, 2026: PSE&G reached a summer peak load of 10,446 megawatts, its highest in 14 years. Storms in early July cut power to about 380,000 customers, and PSE&G restored nearly all of them within 24 hours. Jun 3, 2026: PSEG sold $500 million of long-term debt. In May 2026, a BPU order also made PSEG Power refund about $207 million to the New Jersey utilities for zero emission certificates of 2024 that the production tax credit had offset.