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Jacobs' JV Unit Wins Contract for West Gate Tunnel Project

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Jacobs Engineering Group Inc.’s (JEC - Free Report) joint-venture (JV) business with Aurecon has secured a new contract for Melbourne’s West Gate Tunnel Project.

The West Gate Tunnel Project will become a substitute to Melbourne’s West Gate Bridge. The Western Distributor Authority (WDA) is accountable for the delivery of the prestigious West Gate Tunnel Project. WDA and Transurban have formed a Public Private Partnership for effectively delivering the West Gate Tunnel Project. This vital transport infrastructure plan has received all the required planning and environmental approvals.

A consortium led by CPB and John Holland contractors has selected Jacobs for providing engineering design services for the aforementioned project. The design calls for construction of two new tunnels (each comprising three lanes), broadening the West Gate Freeway (from eight to 12 lanes), and new and upgraded walking and cycling paths (14-kilometers long).

The West Gate Tunnel features a safer road design that contains express lanes connecting the West Gate Bridge and will also build supreme quality noise walls which would protect the privacy of the local community.

The construction-related activities of the project are slated to commence in early 2018 and the newly-built tunnels are anticipated to open up in 2022.

Over the last three months, shares of this Zacks Rank #2 (Buy) company have appreciated 17%, outperforming 9.9% growth registered by the industry.

Our Take

Jacobs has been gaining competency on the back of numerous contract wins. Over the last few months, the company has secured contracts from various institutions and companies like Evonik Industries, Department of Energy National Nuclear Security Administration (NNSA), Aerie Pharmaceuticals, Inc. (AERI - Free Report) and Ferring Pharmaceuticals Inc. Moreover, the acquisition of CH2M HILL Companies Ltd. (closed in December 2017) will likely fortify Jacobs’ business in the quarters ahead.

Jacobs quotes competitive prices for its contracts and ensures that the number of contract receipts increases over time. Notably, elevated transportation spending of the government authorities of Australia, the U.K. and the United States has largely increased the company’s contract-winning opportunities.

Other Stocks to Consider

Two other top-ranked stocks in the same space are listed below:

TopBuild Corp. (BLD - Free Report) currently carries a Zacks Rank of 2. The company has pulled of an average positive earnings surprise of 10.33% in the last four quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CalAtlantic Group, Inc. (CAA - Free Report) also holds a Zacks Rank of 2. The company has generated an average positive earnings surprise of 5.64% during the same time frame.

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