The higher price target comes after the Newark, NJ-based energy and utility holding company reported its 2015 fourth quarter results last week.
PSEG posted operating earnings of 50 cents per share, in line with analysts' estimates. Jefferies was expecting earnings of 45 cents per share.
Revenue for the quarter was $2.28 billion, missing analysts' expectations of $2.35 billion.
"Recent BGS auction prices of $96.38 continue to demonstrate the attractiveness of PEG's power portfolio and, in our view, provides justification for its best in class valuation," Jefferies said in an analyst note.
Since 2002, four New Jersey electric distribution companies have procured several billion dollars of electric supply to serve Basic Generation Service (BGS) customers through a statewide auction process in February, according to the auction website.
BGS customers are not served by a third party supplier or competitive retailer.
PSEG is engaged in the transmission of electricity and distribution of electricity and natural gas. Its subsidiaries are PSEG Power and Public Service Electric and Gas Company (PSE&G).
Shares of PSEG closed higher by 2.02% to $43.84 on Monday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on the stock.
This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks rated.
The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and solid stock price performance.
The team believes its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: PEGPEG data by YCharts