UBS upgraded Public Service Enterprise Group (NYSE:PEG) to Buy from Neutral and raised its price target to $97 from $86, citing strong utility fundamentals and significant hidden value potential tied to PEG’s nuclear portfolio.
The analysts highlighted PEG’s ability to grow EPS at a solid 6.5–7.0% annually without needing to issue equity over its five-year plan, underscoring a stable financial foundation. A key upside catalyst is the possibility of securing a nuclear power purchase agreement (PPA) for about one-third of PEG’s nuclear output at ~$84/MWhr, similar to recent market deals, which UBS values at roughly $7 per share—implying full contracting upside could exceed $20 per share.
UBS noted that while investors remain focused on New Jersey policy uncertainties and timing of a potential PPA announcement, there is clear market appetite for baseload nuclear assets. The firm expects PEG’s nuclear assets to ultimately unlock meaningful shareholder value, paralleling successes seen at peers like Constellation Energy (CEG) and Talen Energy (TLN).
Factoring in this potential value realization, UBS sees PEG’s 2027 EPS reaching $4.20, representing an attractive discount to current forecasts, and positioning shares for significant re-rating as nuclear contracts materialize.
