On March 27, Zacks Investment Research upgraded
New Jersey Resources Corp.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
New Jersey Resources has been witnessing rising earnings
estimates on the back of strong fiscal first-quarter 2014 results
and a higher earnings guidance for fiscal 2014. Moreover, this
natural gas company delivered positive earnings surprises in the
last 4 quarters with an average beat of 18.45%. The long-term
expected earnings growth rate for this stock is 4.0%
New Jersey Resources announced fiscal first-quarter 2014 (ended
Dec 31) results on Feb 6. Operating earnings per share came in at
94 cents, surpassing the Zacks Consensus Estimate of 89 cents by
5.6%. The market reacted positively with the shares gaining 9.2%
since the Feb 6 earnings release to close at $48.13 yesterday.
The company moreover raised its earnings per share projection for
fiscal 2014 to $3.90-$4.10 from $2.75-$2.95 on the strength of
its NJR Energy Services business. Extreme cold weather across the
major part of U.S. increased demand for natural gas. New Jersey
Resources' strategically located assets helped to meet customer
demand in its service areas.
The company has been increasingly investing in infrastructure to
serve a growing customer base. New Jersey Resources expects to
add 14,000 and 16,000 new customers over the next two years,
which we believe will further boost its results.
The new infrastructure programs such as the Southern Reliability
Link and Howell liquefaction project are likely to provide the
company with additional opportunities for rate base growth.
The Zacks Consensus Estimate for fiscal 2014 increased 47.9% to
$4.03 per share. All estimates were revised higher over the last
30 days. The current estimate is within the guidance range
provided by the company.
Other Stocks to Consider
Other stocks in the natural gas space worth considering are
Delta Natural Gas Company, Inc.
AGL Resources Inc.
Atmos Energy Corp.
). Delta Natural Gas holds a Zacks Rank #1 (Strong Buy)
while AGL Resources and Atmos Energy Corporation carry a Zacks
Rank #2 (Buy).
ATMOS ENERGY CP (ATO): Free Stock Analysis
DELTA NAT GAS (DGAS): Free Stock Analysis
AGL RESOURCES (GAS): Free Stock Analysis
NJ RESOURCES (NJR): Free Stock Analysis
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