UBS upgrades PEG to Buy

UBS upgraded Public Service Enterprise Group (NYSE:PEG) to Buy from Neutral, with a new price target of $97, citing strong utility fundamentals and significant hidden value potential in PEG’s nuclear portfolio. The firm highlighted PEG’s ability to grow EPS at 6.5–7.0% annually without needing to issue equity, with a potential nuclear power purchase agreement adding further upside.

Investors are eyeing PEG’s nuclear assets as a key catalyst for unlocking shareholder value, with UBS valuing a potential PPA at $7 per share. The firm sees parallels with successes at peers like Constellation Energy and Talen Energy, expecting PEG’s nuclear contracts to drive significant re-rating and EPS reaching $4.20 by 2027.

While New Jersey policy uncertainties and PPA timing remain concerns, UBS remains bullish on PEG’s prospects, noting strong market appetite for baseload nuclear assets. The firm believes full contracting upside could exceed $20 per share, positioning PEG for substantial value realization and potential share price growth.