New Jersey Resources price target raised to $51 by Mizuho on mixed outlook

Mizuho raised its price target on New Jersey Resources (NJR) to $51 from $50, maintaining a Neutral rating, citing the utility's attractive 11.29x P/E and 4.09% dividend yield. The firm's assessment reflects a mixed outlook, balancing positive developments in regulated segments, such as increased FY25 CapEx for NJNG and alignment with a 7-9% NFE per share growth CAGR, against tempered medium-term growth expectations and a reduced FY25 CapEx for its 'CEV' segment, which Mizuho views as a potential distraction. This nuanced perspective follows NJR's mixed Q3 2025 earnings, where revenue missed expectations by 1.97%, signaling ongoing challenges despite the stock's stability.

Analysis

New Jersey Resources (NJR) presents a mixed financial profile, as reflected in Mizuho's decision to raise its price target to $51.00 while maintaining a Neutral rating. The company's valuation appears reasonable, trading at an 11.29x P/E ratio, and it offers a significant 4.09% dividend yield, underpinned by an impressive 29-year history of consecutive dividend increases. This stability in its regulated business is further supported by positive developments, including a $22.5 million increase in the FY25 CapEx outlook for the NJNG segment. However, these strengths are counterbalanced by notable headwinds. The company's recent Q3 2025 earnings were disappointing, with revenue missing consensus by 1.97% and EPS delivering a surprising negative result against expectations. Furthermore, significant concerns surround the non-regulated 'CEV' segment, where the FY25 CapEx outlook was reduced by $20 million and management commentary indicates tempered growth expectations. Mizuho explicitly identified this segment as a potential 'distraction,' suggesting that its underperformance could weigh on the company's overall trajectory, despite management's reiterated 7-9% growth CAGR target for NFE per share.

Key Decisions for Investors

• Income-focused investors may find the 4.09% dividend yield attractive, especially given the 29-year track record of increases, but should remain aware that challenges in non-regulated segments could pressure future performance.
• Investors should closely monitor the performance of the 'CEV' segment, as its characterization as a 'distraction' and reduced capital expenditure signal a key risk that may cap near-term share price appreciation.
• Given the conflicting signals of a price target upgrade against a recent earnings miss and neutral rating, it may be prudent to await further clarity on the company's ability to meet its 7-9% NFE per share growth guidance before increasing exposure.