New Jersey Resources Corporation (NYSE:NJR) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a curious result overall, with revenues coming in an incredible 42% below what the analysts had expected, at US$467m. Statutory earnings per share beat analyst models by 39% to hit US$0.91. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from New Jersey Resources' four analysts is for revenues of US$2.14b in 2024. This would reflect a huge 25% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 17% to US$2.85. Before this earnings report, the analysts had been forecasting revenues of US$2.41b and earnings per share (EPS) of US$2.78 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes after the latest results, with a substantial drop in revenues at the same time as boosting EPS forecasts.
There's been no real change to the average price target of US$47.63, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic New Jersey Resources analyst has a price target of US$57.00 per share, while the most pessimistic values it at US$43.00. This is a very narrow spread of estimates, implying either that New Jersey Resources is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that New Jersey Resources is forecast to grow faster in the future than it has in the past, with revenues expected to display 35% annualised growth until the end of 2024. If achieved, this would be a much better result than the 2.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.1% annually. Not only are New Jersey Resources' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around New Jersey Resources' earnings potential next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$47.63, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for New Jersey Resources going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for New Jersey Resources (of which 1 is a bit unpleasant!) you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
