Will New Jersey Resources (NJR) Sustain Its Earnings Momentum and Outperform Estimates in Q3 2025?

New Jersey Resources (NJR) has emerged as a compelling case study in the energy sector, balancing the volatility of traditional utility operations with the high-growth potential of clean energy ventures. As the third quarter of 2025 approaches, investors are scrutinizing whether the company can sustain its recent earnings momentum and outperform revised estimates. This analysis examines the interplay of earnings surprises, analyst estimate revisions, and underlying growth fundamentals to assess NJR's prospects for continued outperformance.

Earnings Surprises: A Mixed Signal

NJR's second-quarter 2025 results highlighted its ability to exceed expectations, reporting $1.76 in earnings per share (EPS) against a $1.65 consensus estimate. This $0.11 surprise was driven by the Energy Services segment, which capitalized on winter natural gas price volatility to boost financial margins. However, the same cannot be said for Q3 2025 expectations. The current average EPS estimate for the quarter stands at $0.28, a sharp decline from $0.89 in Q3 2024. Analysts project revenue of $307 million, down from $395.78 million a year prior.

The disparity between Q2's outperformance and Q3's muted expectations raises questions about sustainability. While the company's non-GAAP net financial earnings (NFE) guidance for fiscal 2025 has been raised to $3.15–$3.30 per share (up from $3.05–$3.20), this optimism is not fully reflected in the Q3 numbers. The Energy Services segment's seasonal volatility and the regulated utility division's reliance on rate cases may contribute to this divergence.

Estimate Revisions: A Cautionary Trend

Analyst estimate revisions for Q3 2025 reveal a tug-of-war between optimism and skepticism. Over the past 30 days, one analyst raised their EPS estimate while another lowered it, with the average estimate remaining at $0.28. This pattern mirrors the 7-day trend, suggesting a lack of consensus. The Zacks Consensus Estimate for the current year has seen a 0.8% upward revision in the past month, but the Q3-specific data remains stagnant.

The broader market context adds complexity. NJR's expected Q3 EPS growth of -68.43% (compared to the S&P 500's 6.59% growth) underscores its challenges. While the company's long-term guidance and infrastructure investments inspire confidence, short-term factors—such as regulatory uncertainties and energy market volatility—weigh on near-term estimates. For instance, the Adelphia Gateway rate case and SREC price fluctuations pose risks to Clean Energy Ventures (CEV), which contributed 19–22% of total NFE in 2025.

Growth Fundamentals: A Strategic Edge

Despite the Q3 headwinds, NJR's long-term growth fundamentals remain robust. The company's strategic pivot to high-margin commercial solar projects, following the sale of its residential solar portfolio, has repositioned CEV for scalability. As of March 2025, CEV had installed 417 MW of solar capacity, with year-to-date NFE rising to $44.2 million. The $150 million Infrastructure Investment Program (IIP) further strengthens the regulated utility division, New Jersey Natural Gas (NJNG), by enhancing system reliability and supporting gross margin growth.

NJR's diversified business model—spanning regulated utilities, energy services, and clean energy—has historically insulated it from sector-specific downturns. Its year-to-date NFE of $3.07 per share (up from $2.15 in 2024) and 59% increase in net income for fiscal 2025 highlight its resilience. Additionally, the company's cash flow growth (10.3% year-over-year, vs. the industry's -0.1%) and historical annualized cash flow growth of 12.3% position it to fund innovation and shareholder returns.

Strategic Appeal for Growth Investors

For growth-oriented investors, NJR's combination of earnings growth, cash flow strength, and strategic execution is hard to ignore. The company's Zacks Rank #2 (Buy) and Growth Score of B reflect its alignment with growth criteria. Analysts' 12-month average price target of $54.67 (a 10% upside from current levels) further underscores confidence. However, risks such as regulatory delays and energy market volatility cannot be overlooked.

The key question is whether Q3's low bar can be exceeded through operational execution. If NJR leverages its Energy Services segment's flexibility and accelerates CEV's solar installations, it may not only meet but surpass estimates. Conversely, a failure to navigate near-term challenges could test investor patience.

Conclusion: A Calculated Bet

NJR's ability to sustain its earnings momentum in Q3 2025 hinges on its capacity to balance short-term volatility with long-term strategic clarity. While the current estimates reflect caution, the company's strong guidance, infrastructure investments, and clean energy pivot suggest a path to outperformance. For growth investors, NJR offers a compelling mix of stability and innovation—but a watchful eye on Q3 results and regulatory developments will be critical.

In a market where energy transitions and regulatory shifts dominate, New Jersey Resources stands as a testament to the rewards of strategic adaptability. Whether it can translate this into a Q3 victory remains to be seen—but the groundwork is laid for a compelling story.