New Jersey Resources Rises to the Occasion: Revised 2025 Guidance Points to Strong Growth Ahead
184min read New Jersey Resources (NYSE: NJR) has bolstered investor confidence by raising its fiscal 2025 Net Financial Earnings Per Share (NFEPS) guidance to a range of $3.15–$3.30, marking an upward revision of $0.10 from its initial $3.05–$3.20 target. This increase underscores the company’s robust performance in the first half of the fiscal year, driven by strategic initiatives, regulatory wins, and strong execution across its diversified business segments.
Ask Aime: "Should I buy NJR stock now?"
Key Drivers of the Guidance Increase
1. Second-Quarter Outperformance
NJR’s Q2 2025 results were a key catalyst for the revision. NFEPS (non-GAAP) rose to $1.78, a 27% jump from Q2 2024’s $1.41, while year-to-date (YTD) NFEPS through March 2025 reached $3.07, comfortably exceeding the prior-year period’s $2.15. Consolidated NFE (non-GAAP) surged 29% year-over-year to $178.3 million, reflecting broad-based growth.
Ask Aime: "Can I trust New Jersey Resources' new NFEPS guidance?"
2. Regulated Utility Strength: NJNG Leads the Way
New Jersey Natural Gas (NJNG), NJR’s regulated utility arm, remains the anchor of its earnings. The segment now accounts for 65–68% of fiscal 2025 NFEPS, benefiting from:
- A $157 million annual base rate increase approved in November 2024, featuring a 9.6% return on equity.
- Customer growth: NJNG now serves 588,000 customers, up 5,000 from September 2024, with new accounts contributing ~$2.0 million annually in incremental utility gross margin.
- The SAVEGREEN® energy efficiency program, which invested $52.2 million YTD, enhancing its reputation as a leader in sustainable infrastructure.
3. Clean Energy Ventures (CEV) Accelerates Growth
CEV’s solar portfolio sales and project development are critical to NJR’s transition to renewables. Key milestones include:
- A $54.9 million pre-tax gain from the sale of its 91 MW residential solar portfolio in late 2024.
- 31 MW of new solar capacity placed into service in 2025, with 60 MW under construction. CEV now operates 417 MW of commercial solar and has a 1 GW+ pipeline.
- Expansion into decarbonization projects, aligning with New Jersey’s goal of 100% clean energy by 2050.
4. Energy Services and Storage Deliver Surprises
While NJR’s Energy Services segment faced headwinds from reduced Asset Management Agreement (AMA) revenues, its winter performance shone. Natural gas price volatility in early 2025 boosted margins, contributing $35.3 million in Q2 NFE. Meanwhile, Storage and Transportation improved to $2.3 million in NFE, driven by operational efficiencies at Leaf River and progress on Adelphia’s FERC rate case.
Risks and Considerations
Despite the positive outlook, investors should monitor:
- Regulatory outcomes: Adelphia’s pending rate case (targeting resolution by late 2025) and NJNG’s future rate cases.
- Commodity price volatility: Natural gas and Solar Renewable Energy Credit (SREC) prices remain unpredictable.
- Execution risks: Capital expenditures of $1.3–$1.6 billion over two years require flawless project management.
Valuation and Investment Thesis
NJR’s revised guidance positions it to deliver $3.28 NFEPS midpoint, exceeding its long-term growth target of 7–9% annually. With a 3.63% dividend yield and a five-year dividend CAGR of 8.2%, the stock offers a compelling combination of growth and income.
Conclusion: A Utility with Clean Energy Momentum
New Jersey Resources’ revised guidance reflects its ability to capitalize on regulated utility stability and renewable energy growth. With NJNG’s rate case tailwinds, CEV’s 1 GW+ solar pipeline, and disciplined capital allocation, the company is well-positioned to sustain its 7–9% NFEPS growth target.
Investors should note that NJR’s stock trades at a 14.5x 2025 NFEPS multiple, reasonable for a regulated utility with clean energy exposure. The 3.6% dividend yield and potential for upside to the $3.30 guidance high add further appeal. For those seeking a blend of steady dividends and renewable energy growth, NJR is a compelling play on New Jersey’s energy transition—and a strong candidate for long-term portfolios.
