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Jacobs (JEC) Wins Contract for Polyethylene Plant Extension

JEC EME MTZ XOM

Trades from $3

Jacobs Engineering Group Inc. (JEC - Free Report) secured a contract from Exxon Mobil Corp. (XOM - Free Report) , for an undisclosed amount. Per the deal, Jacobs would be providing its premium engineering, construction management and designing services for part of a new 650 kTa polyethylene facility of Exxon Mobil, located in its Beaumont polyethylene plant.

Per the contract, Jacobs would be supporting the installation as well as works of various offsite facilities of the plant, such as interconnecting piping and rail, for the new polyethylene train. Post completion, the facility will produce pelletized polyethylene which shall be used for manufacturing plastic products.

Jacobs declared that it would design an efficient and safe construction plan for the 650 kTa polyethylene facility, and improve the degree of versatility and integration of the plant as well.

We believe that the latest expansion contract received from Exxon Mobil would reinforce Jacobs’ ongoing organic growth strategy. Moreover, the company has recently won a number of major Australian transportation contracts. All these deals are expected to boost Jacobs’ top line in the quarters ahead.

However, amid such prospective deals, Jacobs carries a Zacks Rank #4 (Sell). Major headwinds such as a strong U.S. dollar, cutthroat industry competition and dismal pricing environment in the global mining and energy markets have been hurting the company’s growth prospects.

Jacobs’ stock price was $59.19 per share as of Nov 15, 2016.

Stocks to Consider

Better-ranked stocks within the industry include EMCOR Group Inc. (EME - Free Report) and MasTec, Inc. (MTZ - Free Report) .

EMCOR currently sports a Zacks Rank #1 (Strong Buy) and has an average positive earnings surprise of 11.96% for the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

MasTec, Inc. currently carries a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 61.26% for the trailing four quarters.

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