Mizuho analyst Gabriel Moreen raised the firm's price target on New Jersey Resources to $38 from $36 and keeps a Buy rating on the shares after the company announced asset management agreements. The pacts derisk New Jersey Resources' "historically volatile marketing arm into something more ratable" and "blunt some of the disappointing news" from the analyst day, Moreen tells investors in a research note.
Included in NJR's release today is the Company's NFE guidance for fiscal 2021. Beginning in fiscal 2021, NJR is adopting a change in the accounting policy for investment tax credits and the expected use of tax equity financing for its solar projects. Principally as a result of the accounting policy change, the Company anticipates fiscal 2021 NFE to be in the range of $1.55 to $1.65 per share. There will be no impact to CEV's cash flows as a result of this accounting change. Patrick Migliaccio, Senior Vice President and CFO, said, "Consistent with our strategic plan to generate sustainable growth across our businesses, going forward we will change the way NJR accounts for investment tax credits and we expect to implement tax equity financing for our solar projects. While this results in a short-term decline in net financial earnings in fiscal 2021, these changes provide the foundation for increasing our investment in solar and are expected to result in stable net financial earnings from our CEV business. Following the earnings reset in fiscal 2021, we expect approximately 30% year-over-year growth in NFE in fiscal 2022, with a 6-10% long-term growth rate thereafter. With ample liquidity to support our businesses, no meaningful refinancings in the near term and a strong capital structure, NJR is extremely well-positioned for the future."
Reports Q4 revenue $400.04M, vs. $479.69M last year. "Thanks to the performance of our talented and dedicated team through an unprecedented global pandemic, we were able to deliver solid results and achieve NFE in-line with our guidance range for fiscal 2020," said Steve Westhoven, President and CEO of New Jersey Resources. "As reflected in our results, we are committed to serving our customers with safe, reliable, clean energy and reaching our sustainability goals through our diversified portfolio of energy infrastructure investments. With the new financial growth targets that we announced in connection with our Analyst Day today, including raising long-term NFEPS and dividend growth rates, our outlook for the future is strong."
New Jersey Resource will host a virtual 2020 Analyst Day to provide an update on the Company's strategic plan and financial growth targets, including: 6-10% long-term annual growth in consolidated net financial earnings per share, a non-GAAP financial measure, beginning in fiscal 2022; 6-10% long-term annual dividend growth; Approximately 20% growth in annual Cash Flows from Operations from fiscal 2020 to fiscal 2024; and Approximately 11% rate base Compounded Annual Growth Rate between fiscal 2019 and fiscal 2024 at New Jersey Natural Gas, the company's regulated utility and largest business segment. "With our talented and capable team, disciplined execution and strong position in the clean energy transition, we are poised to drive long-term value for our shareowners," said Steve Westhoven, President and CEO of New Jersey Resources. "As we move ahead, we will focus on growth at our regulated utility, NJNG, and Clean Energy Ventures, CEV. NJNG is as strong as it has ever been, with an approximately 11% rate base CAGR expected between fiscal 2019 and fiscal 2024. CEV will continue to drive growth as we expand and invest beyond New Jersey, action supported by an approximate doubling of our rate of investment in solar initiatives in four years. At the same time, we are taking a number of strategic steps to deliver more predictable and stable net financial earnings across our other complementary businesses. We remain committed to growing our dividend and, following a reset of NFE in fiscal 2021, are projecting an increase in our long-term NFEPS growth rate."
Catch up on the weekend's top five stories with this list compiled by The Fly: 1. Dunkin' Brands (DNKN), the parent company of Dunkin' and Baskin-Robbins, confirmed that it has held preliminary discussions to be acquired by Inspire Brands. There is no certainty that any agreement will be reached. The company said it will not comment further unless and until a transaction is agreed or discussions are terminated. This follows a news report by the New York Times's Lauren Hirsch saying that Dunkin' Brands was in talks to sell itself to Inspire Brands, in a deal that would take Dunkin' Brands private at a price of $106.50 a share. 2. Blackstone (BX) has struck a deal to buy Simply Self Storage from Brookfield Asset Management (BAM), The Wall Street Journal's Miriam Gottfried reports. The private-equity company's nontraded real-estate investment trust, known as BREIT, is buying the 8M square-foot portfolio of self-storage facilities for about $1.2B. The deal is expected to be announced Monday, the author adds. 3. Sprouts Farmers Market (SFM) was a COVID-19 winner, and then it was a COVID-19 loser, but its earnings report on October 28 could make it a winner again, Teresa Rivas wrote in this week's edition of Barron's. After peaking in the March quarter, Sprouts' same-store sales declined as consumers favored one-stop-shops like Target (TGT) and Walmart (WMT) to reduce the risk of virus exposure, the author noted, adding that its stock has dropped 22% in the past three months. However, Sprouts' earnings could help the stock reverse course, the publication contended. 4. Coca-Cola European Partners (CCEP) announced it has made a non-binding proposal to acquire Coca-Cola Amatil (CCLAY). The Board of Directors of CCEP has made a non-binding offer to acquire 69.2% of the entire existing issued share capital of Coca-Cola Amatil, which is held by shareholders other than Coca-Cola, to be effected by means of a scheme of arrangement; and has entered into a non-binding heads of terms and cooperation letter with Coca-Cola (KO), setting out the terms on which Coca-Cola European Partners proposes to acquire Coca-Cola's 30.8% interest in Coca-Cola Amatil, conditional upon Australian regulatory approvals and the implementation of the scheme of arrangement. Coca-Cola Amatil's Independent Shareholders would receive A$12.75 per share in cash. Coca-Cola would receive A$9.57 per share in cash for part of their shareholding, which comprises 10.8% of Coca-Cola Amatil's shares. Coca-Cola European Partners will work with Coca-Cola to acquire all of Coca-Cola's remaining 20% shareholding in Coca-Cola Amatil, in connection with which Coca-Cola European Partners may satisfy part of the consideration for these Coca-Cola Amatil shares by the issue of Coca-Cola European Partners shares at an agreed conversion ratio. 5. Coca-Cola, NextEra Energy (NEE), Xcel Energy (XEL), WEC Energy (WEC), Eversource Energy (ES), CMS Energy (CMS), Alliant Energy (LNT), Atmos Energy (ATO), and New Jersey Resources (NJR) saw positive mentions in this week's edition of Barron's.
NextEra Energy (NEE), Xcel Energy (XEL), WEC Energy (WEC), Eversource Energy (ES), CMS Energy (CMS), Alliant Energy (LNT), Atmos Energy (ATO), and New Jersey Resources (NJR) all sport attractive yields and should continue to grow their dividend payouts, Lawrence Strauss writes in this week's edition of Barron's. Reference Link