Back to top

Image: Bigstock

Jacobs (J) to Act as U.K.'s East West Rail Program Partner

Read MoreHide Full Article

Jacobs Engineering Group Inc. (J - Free Report) has received a contract to construct a new rail link between Oxford and Cambridge in the United Kingdom under the East West Rail program.

As a program partner, Jacobs will employ top-notch technical skills in order to bring opportunities for program innovation and outcome-focused benefits for the communities in the region during the three-year development phase of this program. The contract is valued at $50 million (£35 million) over three years.

Apart from delivering engineering solutions, IT support and delivery, Jacobs will collaborate with the East West Railway Company or EWR Co’s existing team for providing additional flexible capability, as it continues to develop plans for the new railway.

In this regard, Jacobs People & Places Solutions Senior Vice President Europe and Digital Strategies Donald Morrison said, "East West Rail's intention to be a force for industry change and for the people and communities it will serve aligns with Jacobs' vision for creating a more connected and sustainable world."

Solid Performance

People & Places Solutions or P&PS (representing 63.4% of fiscal 2020 total revenues) serves clients of broad sectors like water, transportation, building, and semiconductors. The P&PS segment’s overall sales pipeline has increased, as both life sciences and electronics customers have moved forward with the previously paused projects. P&PS backlog was up 9.6% year over year for the fiscal second quarter to $15.5 billion.

Recently, Jacobs received a design services contact from Australia’s primary water and sewage utility provider — TasWater. Per the contract, it will provide concept/functional design for estimating purposes, detailed design and construction as well as commissioning support services for TasWater's Bryn Estyn Water Treatment Plant Upgrade project in Hobart, Australia. TasWater estimates the upgrade cost to be more than $155 million.

Also, its PP&S unit has inked a contract from Auckland Transport, New Zealand, to design, consent and construct three stages — 2, 3 and 4 — of the Eastern Busway project. The contract is valued at $455 million and is expected to be completed by 2025.

Jacobs’ shares have gained 18% over the past six months, outperforming the Zacks Engineering - R and D Services industry’s 12.4% growth. Earnings for fiscal 2021 are expected to grow 11.7%. This ensures impressive growth visibility.

Zacks Investment Research
Image Source: Zacks Investment Research

Key Picks

Jacobs currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Quanta Services, Inc. (PWR - Free Report) , ChampionX Corporation (CHX - Free Report) and Howmet Aerospace Inc. (HWM - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings for Quanta, ChampionX and Howmet Aerospace are expected to grow 15.7%, 363.2% and 22.5% for the current year, respectively.