On Wednesday, BMO Capital Markets adjusted its price target for Public Service Enterprise Group Inc. (NYSE:PEG) shares, increasing it to $74 from the previous $69 while maintaining a Market Perform rating on the stock. This update follows a detailed quarterly assessment by the firm.
The revision of the second quarter 2024 earnings estimate for Public Service Enterprise Group to $0.60 is based on the forecasted year-over-year decline, which was anticipated during the first quarter 2024 earnings call. The decline is attributed to the fourth quarter 2024 weighted shaping at the company's Power division, yet the full-year contribution is expected to remain stable.
BMO Capital Markets anticipates that during the upcoming earnings call, investors' attention will likely be directed towards several key areas. These include the ongoing New Jersey rate case process, the fundamentals of the power market, and the company's updated forecast regarding data center-related contracts as well as long-term forward hedging strategies.
The firm has reiterated its Market Perform rating, indicating that the valuation of Public Service Enterprise Group's stock aligns with market performance expectations. The new price target of $74 reflects an adjustment to current market conditions, as explained by the analyst from BMO Capital Markets.
In other recent news, Public Service Enterprise Group (PSEG) reported a net income of $1.06 per share for the first quarter of 2024, down from $2.58 per share in the previous year, while reaffirming its full-year non-GAAP operating earnings guidance of $3.60 to $3.70 per share.
Guggenheim recently upgraded PSEG's stock from a Neutral to a Buy rating, citing confidence in near-term gains from data center deployments and a positive reassessment of commodity curves and generation opportunities.
Analysts from BofA Securities and Mizuho Securities raised their price targets for PSEG shares to $80, maintaining a Buy rating due to potential earnings per share growth and favorable growth prospects.
BMO Capital Markets also adjusted its price target to $69, maintaining a Market Perform rating. Other recent developments include PSEG's strategic initiatives such as the development of a data center campus in New Jersey, and favorable regulatory conditions.
These initiatives and conditions are expected to drive PSEG's sustainable growth rate of 5-7% in its utility segment and the potential for long-term contracts post-2025. These recent developments are being closely watched by investors and market watchers.
InvestingPro Insights
As Public Service Enterprise Group Inc. (NYSE:PEG) navigates through market fluctuations and strategic shifts, the latest data from InvestingPro provides a comprehensive view of the company's financial health and stock performance. With a market capitalization of $36.65 billion and a P/E ratio of 20.4, the company maintains a strong presence in the industry. Despite a revenue decline of 8.9% over the last twelve months as of Q1 2024, Public Service Enterprise Group boasts a substantial gross profit margin of 37.85%, underscoring effective cost management.
InvestingPro Tips highlight that the company has a track record of consistent dividend payments, having maintained them for 54 consecutive years, with a dividend yield of 3.26% as of the latest data. Additionally, the stock generally trades with low price volatility, providing a level of stability for investors. It's worth noting that four analysts have revised their earnings upwards for the upcoming period, signaling confidence in the company's financial outlook. For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be accessed with the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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