After Public Service Enterprise Group Incorporated’s (NYSE:PEG) earnings announcement in December 2018, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 15% in the upcoming year against the past 5-year average growth rate of 2.3%. Currently with trailing-twelve-month earnings of US$1.4b, we can expect this to reach US$1.7b by 2020. Below is a brief commentary on the longer term outlook the market has for Public Service Enterprise Group. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Public Service Enterprise Group perform in the near future?
The longer term expectations from the 10 analysts of PEG is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for PEG, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 7.7% based on the most recent earnings level of US$1.4b to the final forecast of US$1.9b by 2022. This leads to an EPS of $3.68 in the final year of projections relative to the current EPS of $2.85. Margins are currently sitting at 15%, which is expected to expand to 17% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Public Service Enterprise Group, there are three essential factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Public Service Enterprise Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Public Service Enterprise Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Public Service Enterprise Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.