25Q3 GAAP diluted loss per share was $0.15 and net financial earnings per basic share (NFEPS), a non-GAAP measure, was $0.06. That compares with 24Q3’s GAAP loss per share of $0.12 and net financial loss per share of $0.09. I had projected GAAP EPS of $0.01 and NFEPS of $0.01. The improvement in 25Q3’s NFEPS vs 24Q3 was due to higher utility margin at New Jersey Natural Gas (NJNG) and improved profitability at Storage and Transportation (S&T), which more than offset profit declines at Clean Energy Ventures (CEV) and Energy Services (ES).
Management raised the low end of its fiscal 2025 full year NFEPS guidance range by a nickel to $3.10-$3.20. At the midpoint, the updated guidance represents a 7.1% increase from fiscal 2024’s $2.95. This year’s results include the $0.30 gain on the sale of NJR’s Sunlight Advantage business, a one-time item, and much of the Energy Services 25Q2 beat may be difficult to repeat. Excluding these items, baseline fiscal 2025 NFEPS is $2.83, little changed from fiscal 2024. According to NJR’s long-term NFEPS growth target of 7%-9%, this suggests that NFEPS will decline in fiscal 2026, net of the CEV portfolio sale gain and above normal ES profitability.
Updated for 25Q3 results, my projections now show fiscal 2025 GAAP diluted EPS of $3.38 and NFEPS of $3.33, compared with previous estimates of $3.53 for GAAP EPS and NFEPS. For fiscal 2026, I forecast GAAP diluted EPS of $3.33 and NFEPS of $3.13, compared with $3.03 and $3.06 previously. My projections represent a 10% increase from the implied NFEPS fiscal 2025 base of $2.83, which is above NJR’s NFEPS growth target of 7%-9%.
Since my last report (on 5/24/25), NJR’s stock has risen 2.7%, modestly below the S&P Mid-Cap 400’s 4.9% gain and in line with the Dow Jones U.S. Gas Utility Index’s 3.3% gain. It underperformed both benchmarks until the second half of July and has outperformed since then. The stock remains among the cheapest on price-to-earnings in its peer group, trading at 14.1 times projected 2025 NFEPS and 15.0 times projected 2026 NFEPS, below the peer group averages of 17.3 for 2025 and 16.2 for 2026.
As noted previously, there are a few possible explanations for the low relative valuation. First, NJR is one of only a few gas utility stocks for which consensus estimates anticipate a decline in 2026 earnings. Second, the longer-term prospects for NJR’s unregulated businesses are difficult to predict. Clean Energy Ventures has lost a steady profit contributor with the sale of its Sunlight Advantage business and now faces the prospect of lower demand for solar in the wake of the Trump administration’s rollback of tax incentives. The profit contribution of Energy Services has also been volatile over time and difficult to forecast. Finally, the State of New Jersey has advanced measures to address rising consumer utility costs, including directing the New Jersey Board of Public Utilities to give greater consideration to affordability in its future rate-making decisions.
I am maintaining my $49 price target on NJR’s stock. (Although the current stock price is tight to the PT, I will defer consideration of an increase until management offers fiscal 2026 guidance when it releases 25Q4 results.) The price target equals 15.8 times projected 2026 NFEPS of $3.13. It represents a potential total return of 8.2%, including the stock’s 3.8% dividend yield. Thus, I am also maintaining my performance rating of “3” (Neutral).
The stock’s improved relative price performance is worth watching. Solar energy assets are currently out of favor, owing to low energy prices and the loss of tax benefits. Poor investor sentiment could turn around quickly, however, if energy prices rebound. NJR plans to begin construction over the next two years on 131 MW of projects, which could eventually contribute meaningfully to its performance and implied valuation. Besides CEV, the company also could benefit from further investments in natural gas infrastructure assets, such as storage and pipelines.
This is a summary of my recent update report on New Jersey Resources Corp. (NJR). To obtain a copy of the report, please reach out to me using the contact information provided below.
August 13, 2025 (Report published on August 8, 2025.)
Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com
© 2015-2026 by Stephen P. Percoco, Lark Research. All rights reserved.
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