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Jacobs' (JEC) Growth Prospects Bright Amid Major Headwinds
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On Dec 30, 2016, we issued an updated research report on premium technical services company, Jacobs Engineering Group Inc. .
Jacobs’ stock is currently engulfed with both optimistic and pessimistic aspects.
On a year-to-date basis, shares of this Zacks Rank #3 (Hold) stock recorded a return of 36.54% – outperforming the 27.61% return provided by the Zacks categorized Engineering/R&D Services industry.
Notably, the company’s projected earnings per share growth (F1/F0) is currently pegged at 1.73%. However, estimated sales growth (F1/F0) is valued at -0.78%.
The company is poised to grow on the back of new contract wins and strategic restructuring moves. However, headwinds within the industry might curtail near-term growth.
Over the last seven days, the Zacks Consensus Estimate for the stock has remained unchanged for both fiscal 2017 and 2018, reflecting neutral market sentiments.
Existing Scenario
Jacobs has been enjoying a booming transportation business, of late, on the back of increased transportation expenditure of the government authorities of the UK, U.S. and Australia. In addition, the company has recently secured several deals from renowned institutions and public sector agencies, like the U.S. Army, EQUATE Petrochemical Company, Exxon Mobil Corporation, TransCanada Corporation and Sellafield Ltd.
In a bid to become a high performing company and streamline operations, Jacobs has segregated its operating and reporting structure into four major business segments from second-quarter fiscal 2016. The company expects to offer superior quality services to its global clients with this move. Notably, shifting its global headquarters to Dallas will likely improve the efficiency of Jacobs’ operations in the near term.
We even notice that Jacobs is highly committed toward its shareholders and intends to provide them higher returns via lucrative share repurchase program.
However, the company’s revenues are currently hurt due to depressed demand for construction services in the international market. Sluggish global economic growth has dragged down commodity and construction service prices, thus hampering Jacobs’ top-line performance.
Additionally, the company is securing lesser high-value energy contracts due to dismal pricing conditions prevailing in the energy market.
However, a stronger U.S. dollar might further depress the company’s international revenues and profitability in the quarters ahead.
Key Picks
Better-ranked stocks in the industry include Willdan Group, Inc. (WLDN - Free Report) , MasTec, Inc. (MTZ - Free Report) and Comfort Systems USA, Inc. (FIX - Free Report) .
Willdan Group, Inc. has an average positive earnings surprise of 18.72% for the last four quarters. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MasTec, Inc. currently carries a Zacks Rank #2 (Buy). The company’s average positive earnings surprise is 61.27%, for the trailing four quarters.
Comfort Systems USA, Inc. also has a Zacks Rank #2. The company’s average positive earnings surprise, for the trailing four quarters, is 15.83%.
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Jacobs' (JEC) Growth Prospects Bright Amid Major Headwinds
On Dec 30, 2016, we issued an updated research report on premium technical services company, Jacobs Engineering Group Inc. .
Jacobs’ stock is currently engulfed with both optimistic and pessimistic aspects.
On a year-to-date basis, shares of this Zacks Rank #3 (Hold) stock recorded a return of 36.54% – outperforming the 27.61% return provided by the Zacks categorized Engineering/R&D Services industry.
Notably, the company’s projected earnings per share growth (F1/F0) is currently pegged at 1.73%. However, estimated sales growth (F1/F0) is valued at -0.78%.
The company is poised to grow on the back of new contract wins and strategic restructuring moves. However, headwinds within the industry might curtail near-term growth.
Over the last seven days, the Zacks Consensus Estimate for the stock has remained unchanged for both fiscal 2017 and 2018, reflecting neutral market sentiments.
Existing Scenario
Jacobs has been enjoying a booming transportation business, of late, on the back of increased transportation expenditure of the government authorities of the UK, U.S. and Australia. In addition, the company has recently secured several deals from renowned institutions and public sector agencies, like the U.S. Army, EQUATE Petrochemical Company, Exxon Mobil Corporation, TransCanada Corporation and Sellafield Ltd.
In a bid to become a high performing company and streamline operations, Jacobs has segregated its operating and reporting structure into four major business segments from second-quarter fiscal 2016. The company expects to offer superior quality services to its global clients with this move. Notably, shifting its global headquarters to Dallas will likely improve the efficiency of Jacobs’ operations in the near term.
We even notice that Jacobs is highly committed toward its shareholders and intends to provide them higher returns via lucrative share repurchase program.
However, the company’s revenues are currently hurt due to depressed demand for construction services in the international market. Sluggish global economic growth has dragged down commodity and construction service prices, thus hampering Jacobs’ top-line performance.
Additionally, the company is securing lesser high-value energy contracts due to dismal pricing conditions prevailing in the energy market.
However, a stronger U.S. dollar might further depress the company’s international revenues and profitability in the quarters ahead.
Key Picks
Better-ranked stocks in the industry include Willdan Group, Inc. (WLDN - Free Report) , MasTec, Inc. (MTZ - Free Report) and Comfort Systems USA, Inc. (FIX - Free Report) .
Willdan Group, Inc. has an average positive earnings surprise of 18.72% for the last four quarters. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MasTec, Inc. currently carries a Zacks Rank #2 (Buy). The company’s average positive earnings surprise is 61.27%, for the trailing four quarters.
Comfort Systems USA, Inc. also has a Zacks Rank #2. The company’s average positive earnings surprise, for the trailing four quarters, is 15.83%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>