PSEG Gains Momentum Through Smart Investments and Clean Energy Plans

Public Service Enterprise Group, Inc. (PEG) or PSEG, is prioritizing renewable expansion, which is expected to strengthen its position in the clean energy market. To better serve its customers, the company consistently invests in infrastructure upgrades that enhance the reliability of its transmission and distribution system.

However, this Zacks Rank #3 (Hold) company faces risks related to a weak solvency position.

PEG’s Major Upside Drivers

Public Service Enterprise is benefiting from the nationwide boom in clean energy investments as U.S. utility-scale solar, wind and storage projects continue to grow. In response, its subsidiary PSEG has expanded its solar efforts, holding 158 megawatts (MW) of grid-connected solar capacity across New Jersey as of December 2024.

PSEG plans to invest roughly $3.8 billion in 2025 to support infrastructure upgrades, energy efficiency initiatives, electrification projects and load growth. Between 2025 and 2029, the company expects to allocate $22.5-26 billion in capital. These substantial investments are intended to expand its clean energy programs while boosting system resilience and customer reliability. This disciplined investment is projected to drive compounded annual growth of 6-7.5% in its rate base over the same period.

Beyond expanding its renewable generation portfolio, PSEG is pursuing multiple initiatives to reduce GHG emissions, including the implementation of New Jersey’s energy efficiency programs. These efforts aim to improve customer energy efficiency, cut emissions, expand EV infrastructure, add storage to support solar output and strengthen grid resiliency. Collectively, these measures support the company’s goal of achieving net-zero carbon emissions by 2030.

Potential Risks for PEG Stock

PSEG’s strategy includes significant capital investments to modernize its transmission and distribution systems, support growing demand and advance clean energy initiatives. Key efforts include energy efficiency programs, transmission projects outside its service territory and upgrades to its nuclear facilities. While several large projects are underway or under review, they rely on timely regulatory approvals and effective execution. Delays, rising costs or construction issues could weaken financial performance by reducing margins and straining cash flow.

As of Sept. 30, 2025, the company owed $22.54 billion in long-term debt. Its cash balance of $0.33 billion at the end of the third quarter fell short of its long-term debt levels and the current debt value of $1.7 billion. This shows that PSEG has a weak solvency position.

PEG Stock Price Movement

In the past six months, PEG shares have risen 4.1% compared with the industry’s growth of 11.9%.

Stocks to Consider

Some better-ranked stocks from the same industry are FirstEnergy Corp. (FE), Entergy Corporation (ETR) and IDACORP, Inc. (IDA), each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FE’s long-term (three to five years) earnings growth rate is 6.46%. The Zacks Consensus Estimate for its 2025 revenues is pegged at $14.40 billion, which calls for a year-over-year jump of 6.9%.

ETR’s long-term earnings growth rate is 10.21%. The Zacks Consensus Estimate for its 2025 earnings per share (EPS) is pinned at $3.90, which indicates a year-over-year rally of 6.9%.

IDA’s long-term earnings growth rate is 8.01%. The Zacks Consensus Estimate for its 2025 EPS is pegged at $5.84, which implies a year-over-year rise of 6.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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