Jacobs Engineering Group Inc. JEC recently inked a feasibility study deal with Borealis in a bid to further strengthen the long-standing relation between the companies. The study is expected to be completed by mid-2017. The value of the contract was not disclosed.
In spite of a challenging macro-economic environment, the Jacobs stock looks promising. This is because the company has restructured its business into four new different segments in Jan 1, 2016, to accelerate commercial growth.
On a year-to-date basis, Jacobs’ shares recorded an average return of 47.82%, which outperformed the average Zacks-categorized Engineering/Research & Development Services industry return of 27.23%.
Borealis Contract Details
Per the newly secured contract, Jacobs would be conducting feasibility study for Borealis’ propane dehydrogenation (‘PDH’) plant at Kallo, Belgium. The company has also been entrusted with the task of formulating a front-end-loading stage 2 (FEL-2) conceptual design package for the external battery limit areas of the PDH plant of Borealis.
The revamped PDH plant is likely to have an annual manufacturing capacity of 740 kilotons per annum. It would also become one of the most efficient and largest facilities in the world.
Borealis is a leading provider of innovative solutions in the domains of base chemicals, polyolefins and fertilizers. The company has a well-established relation with Jacobs as the latter has undertaken numerous projects and studies for it in the past.
Jacobs currently carries a Zacks Rank #3 (Hold). The company plans to improve its performance by streamlining operations, reducing costs and managing working capital more efficiently. In addition, Jacobs intends to reward shareholders with lucrative buyback offers. However, headwinds like unfavorable commodity and energy prices as well as a stronger U.S. dollar raise concerns.
Jacobs’ stock was valued at $61.72 per share as of Nov 29, 2016. The stock has gained 4% since the fiscal fourth-quarter 2016 earnings release on Nov 22, 2016.
Stocks to Consider
Willdan Group, Inc. delivered an average positive earnings surprise of 18.72% in the trailing four quarters. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MasTec, Inc. currently carries a Zacks Rank #2 (Buy). It posted an average positive earnings surprise of 61.27% for the trailing four quarters.
Comfort Systems USA, Inc. currently carries a Zacks Rank #2. The company delivered an average positive earnings surprise of 15.83%.
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