KBR, Inc. ( KBR Quick Quote KBR - Free Report) has updated its 2025 long-term financial targets, depicting expected benefits from the HomeSafe alliance joint venture. HomeSafe Alliance LLC — a joint venture between KBR and Tier One Relocation — secured a contract in November 2021 to improve the Department of Defense's military and civilian personnel’s domestic and international relocation experience. KBR holds a 72% ownership stake in HomeSafe. The contract, with a ceiling value of $20 billion, is expected to aid KBR with "strong" earnings and cash accretion as well as an increased funding source diversification. Updated Long-Term View
KBR has lifted its 2025 guidance to reflect continued business momentum. The company expects revenues to reach $9.5 billion, up 19% from the earlier expectation of $8 billion. This reflects a CAGR of 12-14% for the 2021-2025 period.
Adjusted EBITDA is expected to be $925 million for 2025, with an EBITDA margin of 10%. This reflects a 16% increase from its earlier expectation of $800 million and a CAGR of 12-14%. KBR expects to deliver adjusted EPS of $4.75 in 2025 (reflecting a CAGR of 20-25%), free cash flow per share of $4.75, ROIC of 14-16% and an effective tax rate of 24-25%. Share Price Performance Image Source: Zacks Investment Research
KBR’s solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses. KBR’s shares have gained 38.1% in the past six months, outperforming the Zacks
Engineering - R and D Services industry’s 1.5% rise. Zacks Rank & Key Picks
Currently, KBR carries a Zacks Rank #3 (Hold). You can see
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