Public Service Enterprise Group Incorporated (PEG) Stock Valuation — DCF Analysis
Regulated Electric · NYSE
Current Price
$80.41
Intrinsic Value
Use the calculator below to estimate
COMPETITIVE MOAT
↑Regulated Monopoly Power
As a regulated utility, PSEG enjoys a protected service territory, limiting competition and ensuring a stable customer base for its essential electric and gas services.
↑Essential Service Demand
Electricity and gas are fundamental needs, creating consistent and inelastic demand for PSEG's services, regardless of economic fluctuations.
↑Community Reputation & ESG Focus
Consistent recognition in sustainability indices and community care reflects strong stakeholder relationships, potentially aiding regulatory approvals and customer loyalty.
INVESTMENT RISKS
↓Regulatory Scrutiny & Rate Changes
PSEG's profitability is heavily dependent on regulatory decisions regarding rates. Proposed bill reductions, while customer-friendly, could impact future earnings if not offset by efficiency gains.
↓Capital Intensity & Infrastructure Needs
Maintaining and upgrading aging infrastructure requires significant ongoing capital investment, posing a financial strain and potential for project delays or cost overruns.
↓Transition to Renewables
The shift towards renewable energy sources presents challenges in adapting PSEG's existing infrastructure and business model, potentially leading to stranded assets or increased operational costs.
Customize the PEG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Public Service Enterprise Group Incorporated respond.
Open DCF Calculator for PEGCompany Overview
Public Service Enterprise Group Incorporated (PSEG) is an energy provider primarily operating through its subsidiaries in the Northeastern and Mid-Atlantic United States. The company's business activities are structured into two primary segments: PSE&G and PSEG Power. The PSE&G division is responsible for transmitting electricity and distributing both electricity and natural gas to residential, commercial, and industrial customers. This segment also commits resources to solar power generation projects and various energy efficiency initiatives, as well as offering appliance service and repair. By December 31, 2021, its substantial infrastructure included 25,000 circuit miles of electric transmission and distribution systems, supported by 862,000 utility poles. It also featured 56 switching stations with a total capacity of 39,353 megavolt-amperes (MVA) and 235 substations with a combined capacity of 9,285 MVA. The electric network was further managed by four main and five sub-electric distribution headquarters. On the gas side, PSE&G maintained 18,000 miles of gas mains, twelve primary and two secondary gas distribution headquarters, a single meter shop, and 58 natural gas metering and regulating stations. Public Service Enterprise Group Incorporated was established in 1985 and is headquartered in Newark, New Jersey.
Financial Metrics — PEG Stock Valuation Data
Revenue/Share (TTM)
$25.64
FCF/Share (TTM)
$-0.13
ROIC (TTM)
5.1%
ROE (TTM)
13.3%
P/FCF
n/m
EV/EBITDA
11.6x
FCF Yield
-0.16%
Debt/Equity
0.97x
PEG currently has negative free cash flow, so cash-flow ratios such as P/FCF and FCF yield do not give a meaningful read on whether the stock is cheap or expensive. A DCF valuation is unreliable until cash generation turns positive — focus on the path to profitability instead.
Frequently Asked Questions
What is the intrinsic value of PEG?
Public Service Enterprise Group Incorporated currently generates $-0.13 in free cash flow per share. At the current price of $80.41, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is PEG undervalued?
PEG currently has negative free cash flow, so its P/FCF ratio is not meaningful and cannot tell you whether the stock is cheap or expensive. With cash flow negative, a DCF-based undervalued or overvalued judgment is unreliable — look at the path back to positive cash generation instead.
How do I value PEG stock using DCF?
To perform a DCF valuation on Public Service Enterprise Group Incorporated: (1) Start with the trailing free cash flow per share ($-0.13) as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PEG's risk profile — with a debt-to-equity of 0.97x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to PEG?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Public Service Enterprise Group Incorporated, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Regulated Electric trends, then discounting those amounts to today's dollars. PEG's ROIC of 5.1% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect PEG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PEG, with a debt-to-equity ratio of 0.97x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.6x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See PEG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Utilities valuationsDCF and P/E value PEG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.