NEW JERSEY RESOURCES CORPORATION (NJR): what the price requires
The current priced-in claim for NEW JERSEY RESOURCES CORPORATION (NJR) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/NJR
Headline
| Field | Value |
|---|---|
| Ticker | NJR |
| Company | NEW JERSEY RESOURCES CORPORATION |
| Current price | $59.29/sh |
| Composition | Natural Gas Distribution (NJNG) 66% / Clean Energy Ventures (CEV) 6% / Energy Services (ES) 23% / Storage & Transportation (S&T) 5% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 40.2% |
| Multiple paid | 13x operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 6.3% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~4%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.58σ |
| cohort percentile (of 70 peers) | 13 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.39x | 5 | expensive |
| Earnings | 1.63x | 3 | expensive |
| Relative | 0.74x | 3 | justifies |
| Growth | 1.15x | 4 | expensive |
Families that justify the price: Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $118.13 | 0.50x | yes | FCF base $0.7B, growth 5% (input: historical growth), terminal g 4.0%, WACC 9.2%, 5yr projection |
| DCF Exit Multiple | Growth | $67.94 | 0.87x | yes | Exit EV/EBITDA: 6.7x / 8.7x / 10.7x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $80.13 | 0.74x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.8x / 20.0x / 23.2x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $7.69 | 7.71x | yes | Stage 1: -27% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $36.37 | 1.63x | yes | BV/sh $26.10, ROE (TTM) 12.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $42.59 | 1.39x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $41.74 | 1.42x | yes | Rev $2.2B, growth 5% (input: historical growth; tapered), Terminal P/S: 2.3x / 2.8x / 3.2x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $33.06 | 1.79x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.45B × (1−21%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $43.90 | 1.35x | yes | BV $26.10 + 5yr PV of (ROE (TTM) 12.9% − Kₑ 9.3%) × BV; BV grows 8.4%/yr |
| Graham Number | Asset | $44.49 | 1.33x | yes | √(22.5 × EPS $3.37 × BVPS $26.10) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $89.66 | 0.66x | yes | EBITDA $0.71B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $66.45 | 0.89x | yes | FCF $641.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $2.82 | 21.02x | yes | EPS $3.37 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $23.69 | 2.50x | yes | BV $26.10 × (ROIC 8.4% / WACC 9.2%) |
| P/Sales Sector | Relative | $53.69 | 1.10x | yes | Revenue $2.18B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $36.43 | 1.63x | yes | EPS $3.37 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $3.3b |
| Net debt / NOPAT (after-tax) | 5.54x |
| Net debt / operating income (pre-tax) | 4.37x |
| Interest coverage | 5.6x |
| Share count CAGR (dilution) | 1.3% |
| Burning cash | no |
Bullet Takeaways
- New Jersey Resources is anchored by its regulated gas utility, New Jersey Natural Gas, whose earnings grow with infrastructure investment, sitting alongside a more volatile energy-logistics and clean-energy business.
- The biggest swing factor is that second business: the recent guidance raises were driven by the energy-services and logistics arm outperforming, which is a genuine tailwind but a less predictable one than the regulated utility, so the earnings beat carries more variability than a pure utility would.
- Watch the company's ability to fund its $4.8 to $5.2 billion capital plan without issuing large blocks of new stock, which management has flagged as a sign of its cash-generating strength.
Bull Case
New Jersey Resources is a mature utility holding company, and reading it correctly means separating its two engines. The first is New Jersey Natural Gas, a regulated gas distributor whose earnings grow the way every regulated utility's do: by investing in pipes and infrastructure on which the regulator allows a return. That is the steady, predictable base. The second is a collection of energy-logistics, storage, and clean-energy businesses that earn higher but lumpier returns. The bull case is that the regulated base provides the floor while the second engine provides the upside, and lately the upside has been substantial.
The recent results show both engines running. Fiscal second-quarter net financial earnings, the company's preferred measure, came in at $221.5 million, or $2.20 per share, well ahead of the prior year and above expectations, on revenue of $939.4 million. On the strength of that, management raised its full-year net financial earnings guidance to a range of $3.48 to $3.63 per share, the second increase of the year, citing continued outperformance in the energy-services business. A company raising guidance twice in one year is one whose plan is exceeding its own expectations, not straining to meet them.
The capital-allocation story is the quiet strength. Management has emphasized that it can fund a $4.8 to $5.2 billion capital plan without issuing large blocks of new equity, while maintaining its credit metrics and growing the dividend. For a utility, avoiding block equity issuance matters because it means the growth is self-funded from cash flow and modest financing rather than diluting existing holders to pay for the build. The clean-energy ventures add a longer-dated growth option as renewable adoption expands. For a buyer at today's price, the bull case is a regulated utility base plus an outperforming logistics arm, funding its own growth and trading in the lower half of its peer multiple range, which is an attractive combination of stability and upside.
Bear Case
The external variable with the most leverage over New Jersey Resources is the one that also makes it harder to value: the energy-services and logistics business that drove the recent beats. Unlike the regulated utility, whose returns are set by a regulator and move slowly, the logistics arm earns its money from trading gas storage and transportation capacity, and those earnings swing with natural-gas price spreads, weather, and market volatility. The same outperformance that lifted guidance twice this year can reverse when the spreads narrow. A bull frames the energy-services strength as proof of skill; a bear notes that a guidance raise built on a volatile segment is a less durable foundation than one built on the regulated base, and the market should pay less for earnings it cannot count on repeating.
The regulated side carries the standard utility sensitivities, chiefly interest rates and the regulatory relationship. A gas distributor funds a large capital program with debt, and New Jersey Resources carries net debt around $3.3 billion, roughly six times trailing operating income, with interest coverage near four times. That is a workable structure for a regulated business, but it is rate-sensitive in two directions: higher rates raise the cost of financing the $4.8 to $5.2 billion capital plan, and they raise the yield investors demand from a dividend stock, pressuring the share price. The plan also depends on the New Jersey regulator continuing to grant timely recovery of infrastructure spending; any souring of that relationship would slow the rate-base growth the utility leans on.
The valuation leaves a modest margin. The relative and forward-growth methods support the price, but the earnings-power method reads it as expensive, near 1.6 times its estimate, because it anchors on the steadier regulated earnings rather than the elevated recent results. Reading the price backward locates the priced-in premium in the storage-and-transportation segment, asking it to hold growth at its self-funding ceiling for about five years, a read the framework itself flags as low-confidence because the segment's small earnings base makes it sensitive to assumptions. The bear case is that the price extrapolates the recent energy-services strength further than a volatile business warrants, and that the regulated base alone would not support today's level if the logistics tailwind fades.
Valuation
The priced-in premium sits in the storage-and-transportation segment, and naming where it lives matters more here than usual. Reading the price backward, the market is paying for that segment to hold operating growth at its self-funding ceiling for about five years. The framework reads that as within range of what comparable businesses have sustained, but it attaches low confidence to the read, because the segment's earnings base is small enough that the inversion is sensitive to its assumptions. The honest takeaway is that the price embeds a moderate growth expectation concentrated in the company's higher-return, more volatile arm, not in the regulated utility.
The methods divide along the line between the two businesses. The earnings-power method reads it as expensive, near 1.6 times its estimate, because it anchors on the steadier, lower trailing earnings rather than the elevated recent results from energy services. That gap is the valuation tension in miniature: the price looks reasonable if you credit the logistics outperformance continuing, and rich if you value the company on its regulated earnings alone. For a holding company whose recent beats came from the volatile segment, the earnings-power caution deserves weight.
Solvency frames the downside without dominating it. Net debt of about $3.3 billion is roughly six times trailing operating income, with interest coverage near four times, a serviceable structure for a regulated utility with predictable cash flows. The more reassuring fact is management's stated ability to fund the $4.8 to $5.2 billion capital plan without large equity issuance, which protects holders from dilution while the build proceeds. The decisive variable is the durability of the energy-services earnings: if the logistics arm keeps performing, the price is fair and self-funded growth compounds; if those earnings normalize, the regulated base has to carry a valuation the earnings-power method already calls full.
Catalysts
The guidance raises are the catalyst that has been reshaping the story. New Jersey Resources lifted its full-year net financial earnings guidance to $3.48 to $3.63 per share, the second increase of the fiscal year after a $0.25 raise in February, driven by continued outperformance in its energy-services business. Whether that segment sustains the strength through the rest of the year, or normalizes, is the swing factor for whether the company lands at the top or bottom of its raised range.
The recent quarter set the pace. Fiscal second-quarter net financial earnings reached $221.5 million, or $2.20 per share, on revenue of $939.4 million, both well ahead of expectations. The regulated utility provides the steady base under those results, and the cadence of its infrastructure investment and any rate proceedings before the New Jersey regulator are the milestones that determine the rate-base growth.
The capital plan and dividend are the longer threads. Management has committed to funding a $4.8 to $5.2 billion capital plan while maintaining credit metrics, growing the dividend, and avoiding large equity issuance, with its clean-energy ventures positioned for longer-term growth as renewable adoption expands. How the company finances that plan, and whether it keeps growing the dividend without diluting holders, are the catalysts income investors should follow.
Peer Cohorts (Per Segment, With Filing Citations)
Natural Gas Distribution (NJNG) / Storage & Transportation (S&T) (reported)
- ATO (ATMOS ENERGY CORP)
- (no filing in the citation store)
- NI (NISOURCE INC.)
- (no filing in the citation store)
- SWX (Southwest Gas Holdings, Inc.)
- (no filing in the citation store)
- SR (Spire Inc.)
- (no filing in the citation store)
Clean Energy Ventures (CEV) (reported)
- CWEN (Clearway Energy, Inc.)
- (no filing in the citation store)
- ORA (ORMAT TECHNOLOGIES, INC.)
- (no filing in the citation store)
- BEPC (BROOKFIELD RENEWABLE CORPORATION)
- (no filing in the citation store)
- AQN (ALGONQUIN POWER & UTILITIES CORP.)
- (no filing in the citation store)
Energy Services (ES) (reported)
- WMB (WILLIAMS COMPANIES, INC.)
- (no filing in the citation store)
- KMI (KINDER MORGAN, INC.)
- (no filing in the citation store)
- OKE (ONEOK INC /NEW/)
- (no filing in the citation store)
- ET (ENERGY TRANSFER LP)
- (no filing in the citation store)
- TRGP (TARGA RESOURCES CORP.)
- (no filing in the citation store)
- EPD (ENTERPRISE PRODUCTS PARTNERS L.P.)
- (no filing in the citation store)
- WKC (World Kinect Corporation)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
New Jersey Resources fiscal Q2 2026 results