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Jacobs (J)-Morrison JV Secures Seat on National Grid's Framework

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Jacobs Engineering Group Inc. (J - Free Report) and Morrison Utility Services Joint Venture (JV) has secured a seat as principal designer and contractor on U.K.’s National Grid's six-year Substations Engineering Procurement Construction (EPC) Framework. National Grid estimates the value of the contract at $1.3 billion.

This framework will facilitate program management, early contractor involvement, design and construction to deliver National Grid's performance-based substation regulatory program under RIIO-T2.

Now, the Jacobs/Morrison Utility Services JV’s scope of work includes new build, extension, replacement and decommissioning of high voltage electricity substations. The JV will also provide solutions to help National Grid support the low-carbon economy using innovation to reduce materials, cost, carbon and scheduling.

Jacobs’ People & Places Solutions Senior Vice President Europe and Digital Strategies Donald Morrison said, "This project creates further opportunities to build on more than 13 years of working collaboratively with National Grid". He further added, “We look forward to driving innovative solutions to reduce benchmark costs and program duration, enabling transition to the sustainable energy system of the future.”

Meanwhile, the company has been on a contract wining spree of late. Efficient project execution has been one of the main characteristics driving Jacobs’ performance over the last few quarters. Backlog at fiscal first quarter-end was $25.1 billion, reflecting an increase of 11% year over year (up 7% on a pro-forma basis). This reflects solid demand for its consulting services.

Jacobs’ shares have gained 22.3% in the year-to-date period compared with the Zacks Engineering - R and D Services industry’s 24.8% rally. Although the stock has slightly underperformed the industry during the said period, the company’s earnings estimates for 2021 have moved up 0.7% over the past seven days, depicting analysts’ optimism regarding bottom-line growth potential. This optimism is backed by improved segmental performances, solid backlog, strategic acquisitions and efforts to focus on the high-value business.

Zacks Rank & Other Key Picks

Jacobs, which shares space with AECOM (ACM - Free Report) in the same industry, currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same industry include Mayville Engineering Company, Inc. (MEC - Free Report) and Altair Engineering Inc. (ALTR - Free Report) , each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Mayville Engineering delivered an average earnings surprise of 23.5% in the last four quarters.

Altair is expected to witness 45.2% earnings growth in 2021.

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