Public Service Enterprise Group (PEG)

The sleeper story is regulatory, not operational: PEG's Q2 commitment to file a full base rate case by year-end 2026 has quietly been reframed into a narrower 'regulatory lag' filing built around keeping rates flat, and when pressed directly, management wouldn't deny the scope change, just repeated 'I would try to keep it at a very high level now'. The obvious headline, guidance reaffirmed at $4.28-$4.40 with 6%-8% long-term growth intact, masks a messier Power segment where GAAP swung to a $130 million net loss against a $68 million non-GAAP operating profit, a gap tied to the widening PECO/West basis differential that management was forced to explain only under analyst pressure. The binding constraint here isn't capital or demand, it's regulatory discretion: New Jersey's affordability politics are now shaping how PSE&G recovers its already-spent capital, and the large-load/AI data center pipeline that bulls are underwriting hasn't grown and has shifted toward smaller 'edge computing' loads rather than hyperscale. My view changes if the actual BPU filing, due 'shortly', comes in as a conventional base rate case with a disclosed revenue requirement rather than a flat-rates-friendly lag mechanism, or if management quantifies the large-load GW figure and shows it growing again.