Celebrations can be announced New Jersey Resources Corporation (NYSE:NJR) shareholders, with analysts raising their legal estimates for the company. Consensus-estimated sales numbers rose and they are now significantly more optimistic about the company’s business prospects. New Jersey Resources has also found favor with investors, with shares up a remarkable 11% over the past week to $49.89. We’re curious if these new estimates will convince the market to push the stock price even higher.
After the recent upgrade, the four analysts covering New Jersey Resources gave consensus estimates of $2.6 billion in revenue for 2023, which would reflect a sharp 9.3% decline in revenue over the trailing 12 months. Statutory earnings per share are expected to fall 13% to $2.47 over the same period. Analysts had previously forecast sales of $2.4 billion and earnings per share (EPS) of $2.46 for 2023. The company’s sales pipeline is clearly bullish, even if earnings-per-share projections aren’t really changing.
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Perhaps unsurprisingly, analysts reaffirmed their price target of $46.56, meaning that revenue growth is unlikely to add much to New Jersey Resources’ valuation anytime soon. It might also be instructive to look at the range of analyst estimates to assess how different the opinions of the outliers are from the mean. There are some divergent perceptions on New Jersey Resources, with the most optimistic analyst rating it at $59.00 and the most bearish at $40.00 per share. These price targets show that analysts have some differing views on the business, but the estimates don’t vary enough to suggest that some are going for wild success or complete failure.
We can also look at these estimates in the context of the bigger picture, e.g. B. how the forecasts compare to past performance and whether the forecasts are more or less optimistic compared to other companies in the industry. Another thing that caught our eye with these estimates is the notion that New Jersey Resources’ decline is likely to accelerate, with earnings expected to fall 9.3% annually through the end of 2023. This caps a historic decline of 3.0% per year over the past five years. Compare that to analyst estimates for companies in the broader industry, which suggest revenue (total) is expected to grow 1.9% annually. So it’s pretty clear that despite declining earnings, analysts expect New Jersey Resources to suffer more than the industry as a whole.
The final result
The most obvious takeaway from this consensus update is that the business outlook has not changed significantly recently, with analysts expecting earnings per share to be stable, in line with previous estimates. Encouragingly, analysts have also raised their revenue estimates and their projections indicate that the business is expected to grow at a slower pace than the overall market. With the dramatic improvement in forecasts this year, it might be time to take another look at New Jersey Resources.
Still, the company’s long-term prospects are far more relevant than next year’s earnings. We have estimates — from multiple analysts at New Jersey Resources — going out to 2025, and you can view them for free on our platform here.
Another way to look for interesting companies that could be reach a turning point is to track with our whether management is buying or selling free List of growing companies that insiders are buying.
The assessment is complex, but we help to simplify it.
find out if New Jersey Resources may be over or under priced by reviewing our comprehensive analysis which includes the following Fair Value Estimates, Risks and Warnings, Dividends, Insider Trading and Financial Health.
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