News Flash: Analysts Just Made A Sizeable Upgrade To Their New Jersey Resources Corporation (NYSE:NJR) Forecasts

Celebrations may be in order for New Jersey Resources Corporation (NYSE:NJR) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. New Jersey Resources has also found favour with investors, with the stock up a noteworthy 11% to US$49.89 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the latest upgrade, the four analysts covering New Jersey Resources provided consensus estimates of US$2.6b revenue in 2023, which would reflect a definite 9.3% decline on its sales over the past 12 months. Statutory earnings per share are supposed to descend 13% to US$2.47 in the same period. Previously, the analysts had been modelling revenues of US$2.4b and earnings per share (EPS) of US$2.46 in 2023. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

Check out our latest analysis for New Jersey Resources

It may not be a surprise to see that the analysts have reconfirmed their price target of US$46.56, implying that the uplift in sales is not expected to greatly contribute to New Jersey Resources's valuation in the near term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on New Jersey Resources, with the most bullish analyst valuing it at US$59.00 and the most bearish at US$40.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One more thing stood out to us about these estimates, and it's the idea that New Jersey Resources' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 9.3% to the end of 2023. This tops off a historical decline of 3.0% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 1.9% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect New Jersey Resources to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at New Jersey Resources.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple New Jersey Resources analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.