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KBR's STS Unit Wins FEED Contract From Fidelis New Energy

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Shares of KBR, Inc. (KBR - Free Report) rose 1.76% on Nov 9, after the company announced that it won a Front-End Engineering Design (“FEED”) contract from Fidelis New Energy for Project Fyrkat.

Per the contract, KBR’s Sustainable Technology Solutions’ (“STS”) experts will provide engineering services to support the liquid carbon dioxide (“LCO2”) handling and storage facility, supporting Fidelis New Energy’s aim to help global decarbonization.

Fidelis New Energy for Project Fyrkat is a LCO2 receiving terminal situated at the Port of Aalborg, Denmark. Project Fyrkat is one of the first onshore CO2 sequestration facilities that is part of Project Norne. Project Norne expects to store more than 20 million tonnes of CO2 per year by 2030.

 

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The stock has fallen 13.5% in the past three months compared with the Zacks Engineering - R and D Services industry’s 9.3% decline. The trend is likely to continue, given the solid backlog level (including award options).

Strategic Initiatives to Boost Backlog

KBR has been gaining from the rising global importance of national security, energy security, energy transition and climate change. It has been benefiting from high-end and differentiated government business work, strong margin performance, technology and consulting services.

KBR's determination to reduce emissions, diversify products, improve energy efficiency and implement more sustainable technologies and solutions have been driving its performance. Demand for the company’s technologies in ammonia for food production, olefins for non-single-use plastics and refining for product diversification and more green solutions to meet tighter environmental standards have been going strong.

KBR has been working on multiple initiatives and contracts to expand its low-carbon ammonia offerings for energy transition, which is a crucial step toward global decarbonization efforts.

On Sep 26, KBR secured a blue hydrogen process technology and FEED contract from EET Hydrogen. This contract is for EET Hydrogen’s upcoming HPP2 low-carbon hydrogen facility as part of the HyNet project, the U.K.'s leading industrial decarbonization project.

As of Sep 29, 2023, the total backlog (including award options) of KBR was $21.8 billion compared with $19.76 billion at 2022-end. Of the total backlog, Government Solutions booked $12.28 billion and the Sustainable Technology Solutions segment accounted for $4.98 billion.

Zacks Rank & Stocks to Consider

KBR currently carries a Zacks Rank #4 (Sell).

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

Fluor Corporation (FLR - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FLR benefits from its diverse presence in various markets, which allows it to reduce the impact of market fluctuations. The Zacks Consensus Estimate for FLR’s 2023 sales and EPS indicates growth of 12.4% and 186.6%, respectively, from the previous year’s reported levels.

Howmet Aerospace (HWM - Free Report) is headquartered in Pittsburgh, PA. The company is engaged in providing engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries.

This Zacks Rank #2 company’s consensus estimate for earnings has increased from 58 cents to 59 cents over the past 60 days.

Sterling Infrastructure, Inc. (STRL - Free Report) currently sports a Zacks Rank #1. STRL delivered a trailing four-quarter earnings surprise of 14.9%, on average.

The Zacks Consensus Estimate for STRL’s 2023 sales and EPS indicates growth of 3.9% and 29.4%, respectively, from the previous year’s reported levels.

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