A downtrend has been apparent in New Jersey Resources (NJR) lately with too much selling pressure. The stock has declined 5.3% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround.How to Determine if a Stock is OversoldWe use Relative Strength Index (RSI), one of the most commonly used technical indicato ...

Core Viewpoint - Growth investors are increasingly focused on stocks with above-average financial growth, which can lead to solid returns, but identifying such stocks is challenging due to their inherent risks and volatility [1] Group 1: Company Overview - New Jersey Resources (NJR) is highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 9.6%, with projected EPS growth of 9% this year, surpassing the industry average of 8.9% [5] - NJR's cash flow growth stands at 10.3% year-over-year, significantly higher than the industry average of 3.3% [6] Group 2: Financial Metrics - The annualized cash flow growth rate for NJR over the past 3-5 years is 12.3%, compared to the industry average of 7.2% [7] - The Zacks Consensus Estimate for NJR's current-year earnings has increased by 1.9% over the past month, indicating a positive trend in earnings estimate revisions [8] Group 3: Investment Potential - NJR has achieved a Growth Score of B and a Zacks Rank of 2 due to positive earnings estimate revisions, suggesting it is a potential outperformer and a solid choice for growth investors [10]

Financial Performance - Total operating revenues for the three months ended March 31, 2025, increased to $913,027 thousand, a 38.7% rise from $657,913 thousand in the same period of 2024[18]. - Net income for the six months ended March 31, 2025, was $335,606 thousand, up 59.7% compared to $210,223 thousand for the same period in 2024[19]. - Basic earnings per share for the three months ended March 31, 2025, increased to $2.04, a 65.0% increase from $1.23 in the same period of 2024[18]. - The company reported a comprehensive income of $335,741 thousand for the six months ended March 31, 2025, compared to $220,504 thousand for the same period in 2024, marking a 52.2% increase[19]. - The company reported a net income of $204,287 thousand for the quarter ending March 31, 2025, up from $131,319 thousand for the previous quarter, a growth of 55.5%[29]. - Consolidated net income for the three months ended March 31, 2025, was $204.3 million, a 69.2% increase from $120.8 million in the same period of 2024[207]. - NJNG reported net income of $144.5 million for the three months ended March 31, 2025, representing a 71% increase compared to $107.1 million in the prior year[207]. - Net financial earnings for the three months ended March 31, 2025, were $178.296 million, compared to $138.576 million in 2024, reflecting an increase of about 28.6%[183]. Revenue Growth - Utility operating revenues for the three months ended March 31, 2025, were $618,341 thousand, a 33.6% increase from $462,863 thousand in the same period of 2024[18]. - Nonutility operating revenues for the six months ended March 31, 2025, rose to $449,620 thousand, a 21.8% increase from $369,167 thousand in the same period of 2024[18]. - Total operating revenues for the six months ended March 31, 2025, reached $1,401,388,000, a significant increase from $1,125,123,000 in the same period of 2024, representing a growth of approximately 24.5%[81]. - Natural gas utility sales for the three months ended March 31, 2025, were $509.451 million, compared to $371.019 million in 2024, reflecting a growth of about 37.3%[77]. - Residential revenues for the six months ended March 31, 2025, were $648,553,000, compared to $519,549,000 in 2024, marking an increase of approximately 24.8%[85]. - The Company’s total revenues from contracts with customers for the three months ended March 31, 2025, were $913,027,000, compared to $657,913,000 in the same period of 2024, reflecting a growth of about 38.7%[85]. Cash Flow and Assets - Cash flows from operating activities for the six months ended March 31, 2025, were $414,078 thousand, compared to $338,602 thousand for the same period in 2024, reflecting a 22.3% increase[22]. - Cash and cash equivalents at the end of the period on March 31, 2025, were $84,691 thousand, significantly higher than $5,746 thousand at the end of March 31, 2024[22]. - Total assets as of March 31, 2025, amounted to $7,265,584 thousand, an increase from $6,981,645 thousand as of September 30, 2024[25]. - Customer accounts receivable as of March 31, 2025, totaled $263,251,000, reflecting an increase of $157,720,000 from the previous balance of $105,531,000 as of September 30, 2024[87]. - The company’s total assets as of March 31, 2025, were $7,265,584,000, an increase from $6,981,645,000 as of September 30, 2024, representing a growth of about 4.1%[181]. Expenses and Liabilities - Total operating expenses for the three months ended March 31, 2025, were $633,078 thousand, up 29.8% from $487,691 thousand in the same period of 2024[18]. - Current liabilities decreased to $731,950 thousand as of March 31, 2025, down from $887,774 thousand on September 30, 2024, a reduction of 17.5%[27]. - Long-term debt increased to $2,970,199 thousand as of March 31, 2025, compared to $2,879,464 thousand on September 30, 2024, indicating an increase of 3.2%[27]. - Total noncurrent liabilities increased to $1,085,528 thousand as of March 31, 2025, compared to $1,013,964 thousand on September 30, 2024, reflecting a rise of 7.1%[27]. Capitalization and Equity - Total capitalization increased to $5,448,106 thousand as of March 31, 2025, up from $5,079,907 thousand on September 30, 2024, representing a growth of 7.3%[27]. - Retained earnings rose to $1,544,235 thousand as of March 31, 2025, compared to $1,298,774 thousand on September 30, 2024, reflecting an increase of 19%[29]. - Common stock equity reached $2,477,907 thousand as of March 31, 2025, an increase from $2,200,443 thousand on September 30, 2024, representing a growth of 12.6%[27]. Regulatory and Compliance - The Company is evaluating the impact of ASU No. 2023-09 on its disclosures, which requires more detailed income tax disclosures effective October 1, 2025[71]. - The FASB's ASU No. 2024-03, effective October 1, 2027, mandates more detailed expense reporting in income statements, which the Company is currently assessing[72]. - The Company’s performance obligation in natural gas utility sales is to provide natural gas based on regulated tariff rates, with revenues recognized in the period of delivery[75]. Investments and Projects - The company completed the sale of its 91 MW residential solar portfolio for a total purchase price of $132.5 million on November 25, 2024[33]. - The Company has commitments for natural gas purchases totaling $219.1 million for the fiscal year 2025, with future demand fees projected to reach $1.01 billion over the next five years[164]. - The Company has not recorded any impairments for SAVEGREEN loans as of March 31, 2025[55]. Derivatives and Financial Instruments - The fair value of the Company's derivative assets as of March 31, 2025, is $34.871 million, while liabilities amount to $23.496 million[101]. - The Company utilizes financial derivatives to hedge the gross margin associated with the purchase of physical natural gas, which can create volatility in results[107]. - Changes in the fair value of NJNG's financial commodity derivatives are recorded as regulatory assets or liabilities on the balance sheets[99].

Financial Data and Key Metrics Changes - For Q2 2025, the company reported an NFEPS of $1.78 per share, an increase from $1.41 per share in the previous year, reflecting higher NFE at New Jersey Natural Gas due to increased utility gross margin from a recent base rate case settlement [21] - The fiscal 2025 NFEPS guidance was raised by $0.10 to a range of $3.15 to $3.3 per share, exceeding the long-term growth target of 7% to 9% [10][12] Business Line Data and Key Metrics Changes - New Jersey Natural Gas continues to show consistent customer growth, driven by new construction, system expansions, and steady conversions, with $254 million invested this year, 46% of which provides near real-time returns [14][16] - Clean Energy Ventures added 31 megawatts of solar capacity this fiscal year and has a project pipeline exceeding one gigawatt, with 60 megawatts currently under construction [18] Market Data and Key Metrics Changes - The storage and transportation segment reported improved performance, particularly at Leaf River, which is undergoing a capacity recovery project [21][19] - The company is exploring the development of a fourth cavern at Leaf River, with encouraging interest from a recent nonbinding open season [19] Company Strategy and Development Direction - The company emphasizes disciplined capital deployment, operational excellence, and strategic innovation across all business segments to ensure long-term sustainable growth [9][10] - The focus remains on affordability and reliability, with ongoing investments in utility infrastructure and clean energy initiatives [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning against macroeconomic factors, particularly tariffs, noting that most gas supply comes from domestic sources, minimizing exposure [26][28] - The company is well-prepared for potential market dislocations, with a strong balance sheet and liquidity, and does not rely on equity issuances to fund its capital plan [28][29] Other Important Information - The company plans capital expenditures between $1.3 billion and $1.6 billion for fiscal 2025 and 2026, aligning with long-term growth targets [22][23] - The adjusted funds from operations to adjusted debt ratio is projected to be between 19% and 21% for fiscal 2025, maintaining a strong investment-grade credit rating [23] Q&A Session Summary Question: Timing and capital requirements for Leaf River expansion - Management indicated that the total capital costs for the Leaf River expansion are estimated between $175 million and $200 million, with no finite timeline set for advancing the project [33] Question: Cost exposure to tariffs for Clean Energy Ventures - Management acknowledged the fluid situation regarding tariffs but emphasized that existing contractual protections should mitigate risks [36][38] Question: Expected economics of Leaf River compared to existing caverns - Management stated that the decision to build would depend on securing appropriate returns and contracts, with a focus on ensuring safety factors in the investment [46] Question: Regulatory environment and affordability initiatives - Management expressed confidence in the regulatory landscape following the completion of a recent rate case, emphasizing ongoing efforts to maintain affordability for customers [49][51] Question: Customer growth fundamentals - Management highlighted that customer growth is driven by a predominantly residential service territory with attractive demographics, and ongoing energy efficiency programs are helping to save customers money [60][61]

Financial Data and Key Metrics Changes - For the second quarter of fiscal 2025, the company reported an NFEPS of $1.78 per share, an increase from $1.41 per share in the previous year, reflecting improved performance across various segments [22][10][12] - The fiscal 2025 NFEPS guidance has been raised by $0.10 to a revised range of $3.15 to $3.30 per share, exceeding the long-term growth target of 7% to 9% [10][12][30] Business Line Data and Key Metrics Changes - New Jersey Natural Gas showed higher utility gross margin due to a recent base rate case settlement, contributing significantly to the overall NFE [22][11] - Clean Energy Ventures reported higher NFE driven by the sale of its residential solar portfolio, which is expected to generate a net benefit of approximately $0.30 per share for fiscal 2025 [22][23] - The storage and transportation segment improved performance, particularly at Leaf River, contributing to higher revenues [22][10] Market Data and Key Metrics Changes - The company continues to see consistent customer growth in New Jersey Natural Gas, driven by new construction and system expansions, with a customer base predominantly residential [14][60] - The company has invested $254 million in New Jersey Natural Gas this year, with 46% of that CapEx providing near real-time returns [16][15] Company Strategy and Development Direction - The company emphasizes disciplined capital deployment, operational excellence, and strategic innovation across all business segments to ensure long-term sustainable growth [9][10] - The Clean Energy Ventures segment is diversifying its project pipeline, with a focus on avoiding overreliance on any single market or policy regime [19][20] - The company is proactive in managing energy affordability through various programs, including BGSS incentive programs, which have saved customers nearly $800 million over the last ten years [15][16] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the current macroeconomic environment, particularly regarding tariffs, is being monitored closely, with minimal expected impact on operations due to domestic sourcing of materials [26][27][29] - The company remains well-positioned for sustained long-term growth, supported by a strong balance sheet and liquidity [29][30] Other Important Information - The company plans capital expenditures ranging from $1.3 billion to $1.6 billion for fiscal 2025 and 2026, aligning with its long-term growth targets [23][24] - The adjusted funds from operations to adjusted debt ratio is projected to range between 19% to 21% for fiscal 2025, maintaining financial flexibility [24] Q&A Session Summary Question: Timing and capital requirements for Leaf River expansion - Management indicated that the total capital costs for the Leaf River expansion are estimated between $175 million to $200 million, with no finite timeline set for advancing the project [34] Question: Cost exposure to tariffs for Clean Energy Ventures - Management acknowledged the fluid situation regarding tariffs but emphasized that existing contractual protections should mitigate potential impacts on project costs [37][38] Question: Expected economics of Leaf River compared to existing caverns - Management stated that the decision to build will depend on securing appropriate returns and contracts, with a focus on ensuring a clear understanding of construction costs [47] Question: Regulatory environment and affordability initiatives - Management expressed confidence in the regulatory environment following the completion of recent rate cases and highlighted ongoing efforts to maintain affordability for customers [50][52] Question: Customer growth fundamentals - Management noted that customer growth is driven by a strong service territory with high per capita income and ongoing energy efficiency programs [60][61] Question: Focus on the Energy Master Plan - Management mentioned that comments have been submitted regarding the Energy Master Plan, with expectations of a new plan following the gubernatorial election [66]

May 2025 Investor Presentation Fiscal 2025 Second Quarter and Year-to-Date Financial Results Non-GAAP Measures This presentation includes the non-GAAP financial measures NFE/net financial loss, NFE per basic share, financial margin, utility gross margin, adjusted funds from operations and adjusted debt. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below. As an indicator of NJR's operating ...

Company Performance - New Jersey Resources (NJR) reported quarterly earnings of $1.76 per share, exceeding the Zacks Consensus Estimate of $1.65 per share, and up from $1.40 per share a year ago, representing an earnings surprise of 6.67% [1] - The company posted revenues of $913.03 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 24.78%, compared to year-ago revenues of $657.91 million [2] - Over the last four quarters, NJR has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - NJR shares have increased approximately 6.2% since the beginning of the year, while the S&P 500 has declined by 3.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $292.42 million, and for the current fiscal year, it is $3.14 on revenues of $1.86 billion [7] Industry Outlook - The Utility - Gas Distribution industry, to which NJR belongs, is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

Financial Performance - Fiscal 2025 second-quarter consolidated net income was $204.3 million, or $2.04 per share, compared to $120.8 million, or $1.23 per share, in the same period of fiscal 2024, representing a 69% increase in net income [6]. - Year-to-date net income for fiscal 2025 totaled $335.6 million, or $3.35 per share, compared to $210.2 million, or $2.14 per share, for the same period in fiscal 2024, indicating a 60% increase [6]. - Net income for the three months ended March 31, 2025, was $204.3 million, representing a 69.2% increase from $120.8 million in the same quarter of 2024 [32]. - Net income for the six months ended March 31, 2025, was $335.6 million, compared to $210.2 million for the same period in 2024, marking a 59.7% increase [40]. - Net income for Energy Services was $61.292 million, compared to $17.028 million in the previous year, representing a 260.5% increase [44]. Revenue and Earnings Guidance - The company raised its fiscal 2025 net financial earnings per share (NFEPS) guidance to a range of $3.15 to $3.30, up from $3.05 to $3.20, reflecting a $0.10 increase due to strong performance from Energy Services [8]. - NJR's total operating revenues for the three months ended March 31, 2025, increased to $913.0 million, up 38.7% from $657.9 million in the same period of 2024 [32]. - Total operating revenues for the three months ended March 31, 2025, increased to $913.0 million, up 38.7% from $657.9 million in the same period of 2024 [40]. - NJR's nonutility operating revenues for the three months ended March 31, 2025, were $294.7 million, up 51.0% from $195.1 million in the same quarter of 2024 [32]. Operating Income and Margins - The company reported a total operating income of $279.9 million for the three months ended March 31, 2025, compared to $170.2 million in the same period of 2024, marking a 64.5% increase [32]. - Utility gross margin for the three months ended March 31, 2025, was $294.8 million, a 29.7% increase compared to $227.3 million in the prior year [36]. - Total Utility Gross Margin for the second quarter of fiscal 2025 was $294.846 million, up from $227.297 million in the same period last year, representing a 29.7% increase [43]. - Operating Income for the second quarter was $197.876 million, compared to $140.279 million in the prior year, reflecting a 40.9% growth [43]. Customer and Service Metrics - NJNG serviced approximately 588,000 customers as of March 31, 2025, an increase from approximately 583,000 customers at September 30, 2024 [12]. - Total Customers reached 588,164, up from 581,600, indicating a growth of 1.4% [43]. - Throughput for NJNG core customers was 35.7 Bcf in Q2 2025, an increase from 32.9 Bcf in Q2 2024, indicating a growth of 8.5% [40]. - Total throughput for the company decreased to 93.0 Bcf in Q2 2025 from 108.3 Bcf in Q2 2024, a decline of 14.0% [40]. Capital Expenditures and Cash Flow - Capital expenditures for the first six months of fiscal 2025 were $287.1 million, compared to $232.6 million during the same period in fiscal 2024, reflecting a 23% increase [21]. - Cash flows from operations for the first six months of fiscal 2025 were $414.1 million, compared to $338.6 million during the same period in fiscal 2024, a 22% increase [21]. Segment Performance - New Jersey Natural Gas reported second-quarter fiscal 2025 NFE of $144.5 million, up from $107.1 million in the same period of fiscal 2024, a 35% increase [11]. - Clean Energy Ventures reported a year-to-date NFE of $44.2 million, compared to $4.9 million for the same period in fiscal 2024, a significant increase attributed to the gain on the sale of its residential solar portfolio [16]. - Energy Services reported second-quarter fiscal 2025 NFE of $35.3 million, down from $37.6 million in the same period of fiscal 2024, a decrease of 6% [18]. - Clean Energy Ventures segment reported a net loss of $3.96 million in Q2 2025, an improvement from a loss of $5.62 million in Q2 2024 [40]. - Energy Services segment's operating income increased to $83.3 million in Q2 2025, compared to $25.5 million in Q2 2024, reflecting a significant growth of 226.5% [40]. Market Capitalization and Stock Performance - The company reported a total market capitalization of approximately $4.92 billion as of March 31, 2025 [41]. - The company’s stock price was $49.06 per share at the end of March 31, 2025, compared to $42.91 per share at the same time in 2024 [41]. Investment Programs - The Infrastructure Investment Program (IIP) consists of a five-year, $150 million accelerated recovery program, with $16.1 million spent in the first six months of fiscal 2025 [12]. Non-GAAP Measures - Management emphasizes the importance of non-GAAP financial measures for providing a clearer understanding of NJR's performance and business model [27].

Core Viewpoint - The market anticipates New Jersey Resources (NJR) will report a year-over-year increase in earnings driven by higher revenues for the quarter ending March 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - NJR is expected to post quarterly earnings of $1.65 per share, reflecting a year-over-year increase of +17.9%, and revenues are projected to be $731.72 million, up 11.2% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 750% lower in the last 30 days, indicating a significant reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.21%, indicating a likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - In the last reported quarter, NJR exceeded the expected earnings of $1.14 per share by delivering $1.29, resulting in a surprise of +13.16%. Over the last four quarters, the company has beaten consensus EPS estimates two times [12][13]. Investment Considerations - While NJR appears to be a strong candidate for an earnings beat, other factors should also be considered when making investment decisions [14][16].

Core Viewpoint - New Jersey Resources (NJR) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings outlook, which is crucial for predicting near-term stock price movements [2][4]. - The correlation between earnings estimate revisions and stock price movements is strong, with institutional investors using these estimates to determine fair value [4]. Company Performance Indicators - New Jersey Resources is projected to earn $3.14 per share for the fiscal year ending September 2025, reflecting a year-over-year increase of 7.2% [8]. - Over the past three months, the Zacks Consensus Estimate for New Jersey Resources has risen by 1.6% [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade to Zacks Rank 2 places New Jersey Resources in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].