New Jersey Resources (NJR) 26Q1 Update

26Q1 GAAP diluted loss per share was $1.22 and net financial earnings per basic share (NFEPS), a non-GAAP measure, was $1.17.  That compares with 25Q1’s GAAP diluted EPS of $1.31 and net financial earnings per basic share of $1.28.  I had projected GAAP EPS of $1.01 and NFEPS of $1.02.  In 26Q1 an 80% decline in Clean Energy Ventures’ NFE, which was caused by last year’s sale of its residential solar energy portfolio, more than offset gains at New Jersey Natural Gas (NJNG), which benefited from an increase in base rates; Energy Services, which capitalized on increased market volatility due to colder weather; and Storage and Transportation (S&T).

Based upon the better-than-expected 26Q1 performance in Energy Services, management raised its fiscal 2026 full year NFEPS guidance range by $0.25 to $3.28-$3.43.  I have adjusted my projections accordingly.  My fiscal 2026 projections anticipate GAAP EPS of $3.43, up from $3.10 previously, and NFEPS of $3.41, up from $3.13.

For fiscal 2027, I project GAAP diluted EPS of $3.32 and non-GAAP EPS of $3.34.  The modestly lower earnings for fiscal 2027 assume a return to normal winter weather, partially offset by improvement across the rest of the businesses.  I expect continuing modest earnings growth for NJNG and faster growth for Storage & Transportation, given favorable prospects for natural gas storage and NJR’s Adelphia Gateway pipeline.  However, I am forecasting that Energy Services’ profitability will be down with a return to normal weather.  CEV is a near-term concern, given the removal of renewable energy tax incentives by the Trump administration.  Even so, long-term prospects for CEV remain favorable, in my view, because energy costs are likely to rise over time.

NJR’s stock traded sideways during 2025; but it has been on a tear since the beginning of the year.  Its most recent sharp upward advance was sparked by the 26Q1 earnings beat, which was reported on February 3.  YTD, the stock has jumped 18.2%, outperforming both the S&P MidCap 400, which is up 9.1%, and its peer group, as measured by the Dow Jones U.S. Natural Gas Utility Index, which has risen 11.1%.  Despite that outperformance vs. peers, NJR’s forward multiples of 16.0 times projected fiscal 2026 NFEPS and 16.3 times projected fiscal 2027 NFEPS are below the peer group averages of 18.1 and 19.6 respectively.  The strength in natural gas distribution utility stocks has been helped by the sharp rebound in energy stocks.

Based upon the improved NFEPS outlook, I am raising my price target on NJR’s stock from $49 to $55, which equals the current price.  The price target equates to 16.3 times projected 2027 NFEPS of $3.34.  That is slightly above the current one-year forward multiple of 16.0.  The price target represents a potential total return of 4.4%, slightly above the current dividend yield of 3.5%.  Accordingly, I am maintaining my performance rating of “3” (Neutral).

Greater upside visibility in the performance of CEV is key to an upgrade in the price target and performance rating.

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.

March 4, 2026 (The report was published on March 2, 2026.)

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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