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KBR Acquires Acetica, Fortifies Petrochemicals Value Chain

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KBR, Inc. (KBR - Free Report) acquired an acetic acid production technology — Acetica. The deal expands KBR's petrochemicals value chain (syngas and acetyls) through a profitable pathway for CO2 utilization.

The technology will produce high-value chemicals such as Vinyl Acetate Monomer (VAM), which is a key ingredient in sustainable coatings, adhesives and other materials that support a net-zero transition to a zero-emissions future. Notably, KBR is the only independent global licensor of acetic acid technology.

Doug Kelly, KBR’s Technology unit president, said, "As the only independently available acetic acid technology in the global market today, KBR's Acetica enables clients to monetize captured carbon through the production of sustainable, high-value products used in our daily lives."

Shares of the company grew 0.31% on Mar 23 and 18.2% in the past six months compared with the industry’s 26.2% growth. Earnings estimates for 2023, which moved up by a cent in the past seven days, reflect a 5.5% year-over-year increase. The trend is likely to continue, given the solid backlog level (including award options).


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KBR’s solid backlog and option level of $19.8 billion (as of Dec 31, 2022) accentuate its underlying strength. In 2022, KBR received $8.2 billion of bookings and options in highly strategic areas, with a 1.2X trailing 12-month book-to-bill. Going forward, KBR expects broad-based growth across both segments.

KBR has been a leader in process technology development, commercialization and plant design for more than 50 years. The determination to lower emissions, achieve product diversification and energy efficiency, as well as develop more sustainable technologies and solutions, have been driving KBR’s performance.

In February, KBR launched Sustainable Aviation Fuel (SAF) technology in alliance with Swedish Biofuels AB. The technology processes ethanol and converts carbon dioxide and synthesis gas to SAF, thereby helping KBR's clients utilize captured carbon toward a cleaner, greener future.

The demand for the company’s technologies across ammonia for food production, olefins for non-single-use plastics, refining for product diversification and more green solutions to meet tighter environmental standards has been going strong. A strategic shift to IP-enabled maintenance is also gaining traction and KBR’s advisory portfolio continues to see increasing activity, particularly in the energy transition.

Zacks Rank & Key Picks

Currently, KBR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Construction sector are:

United Rentals, Inc. (URI - Free Report) currently carries a Zacks Rank #2 (Buy). Shares of URI have gained 51.2% in the past six months. The long-term earnings growth rate of the company is 16.3%.

The Zacks Consensus Estimate for URI’s 2023 sales and earnings per share (EPS) indicates growth of 20.3% and 28.3%, respectively, from the previous year’s reported levels.

Sterling Infrastructure, Inc. (STRL - Free Report) currently carries a Zacks Rank #2. STRL has a trailing fourth-quarter earnings surprise of 19.3%, on average. Shares of the company have gained 77.8% in the past six months.

The Zacks Consensus Estimate for STRL’s 2023 sales indicates a 0.8% decline, while that for EPS suggests 10.8% growth.

Skyline Champion Corporation (SKY - Free Report) currently carries a Zacks Rank #2. SKY has a trailing fourth-quarter earnings surprise of 43.2%, on average. Its shares have rallied 31.4% in the past six months.

Earnings estimates for SKY’s fiscal 2024 have increased to $4.19 per share from $4.04 over the past 60 days.

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