PEG

PEG is executing a textbook regulated-utility playbook, and the numbers confirm it. FY2025 revenue rose 18.3% to $12.2B, operating income jumped 26.6% to $2.98B, and diluted EPS grew 19.2% to $4.22, lifting net margin to 17.3% and ROE to 12.4%. Operating cash flow surged 54.6% to $3.30B. The 10-K reframes the story cleanly: management is 'allocating capital primarily toward regulated investments' and monetizing 'consistent and reliable carbon-free generation' from its nuclear fleet, which carries production-tax-credit downside price protection from 2024 through 2032. Rate base grew from ~$34B to ~$36B, and the 2026-2030 regulated capital program of $22.5-25.5B is guided to a 6.0-7.5% rate-base CAGR — a credible, BPU-underwritten growth engine (GSMP III, CEF-EE II, the October 2024 distribution rate case at a 9.6% allowed ROE). This is a materially more predictable business than the one that posted a -$648M net loss in FY2021.

The balance sheet and cash profile are where discipline is required. Long-term debt rose 14.3% to $21.7B against $17.0B of equity, cash is a thin $132M, and capex of $3.27B nearly consumed all $3.30B of operating cash flow — free cash flow is effectively negative and the $24-28B five-year program will be funded with 'external financings' (long-term debt plus commercial paper). That is normal for a rate-base grower but leaves the equity story dependent on continued regulatory support and investment-grade access; PSEG Power explicitly flags collateral-posting risk on a below-investment-grade downgrade.