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Jacobs (JEC) Displays Solid Prospects Amid Macro Headwinds

On Jul 14, we issued an updated research report on premium technical services company, Jacobs Engineering Group Inc. JEC.

Over the last three months, shares of this Zacks Rank #3 (Hold) stock yielded a return of 1.48%, as against 2.97% loss incurred by the Zacks categorized Engineering/R&D Services industry.

Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable Vale Growth Momentum Style Score ‘A’.

Current Picture

Rise in construction spending in the U.S., as well as robust demand for building and infrastructure services in the Asian end markets are anticipated to bolster Jacobs’ revenues in the quarters ahead. Moreover, the company’s contract-based growth strategy will likely boost top- and bottom-line performances in the near term. For instance, over the last few months, Jacobs secured several contracts from renowned institutions and public-sector agencies like the U.S. Army, EQUATE Petrochemical Company, Florida's Turnpike Enterprise, Exxon Mobil Corporation (XOM) and Codelco. Notably, higher transportation spending of the government authorities of Australia, the UK and the U.S. has increased Jacobs’ contract winning opportunities.  

However, the company noted that the challenging conditions prevailing in the oil and gas market might continue to weigh over its Petroleum & Chemicals segment’s performance.

In addition, we believe that headwinds such as stiff industry rivalry or adverse foreign currency translation impact might thwart the company’s growth, moving ahead.

Over the last 30 days, the Zacks Consensus Estimate for the stock remained unchanged for both fiscal 2017 and 2018, reflecting neutral sentiments.

Stocks to Consider

Some better-ranked stocks in the industry are listed below:

KB Home KBH has an average positive earnings surprise of 12.47% for the last four quarters and currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

D.R. Horton, Inc. DHI carries a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 4.03% for the trailing four quarters.

Eagle Materials Inc EXP also holds a Zacks Rank #2 and has an average positive earnings surprise of 2.66% for the past four quarters.

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Eagle Materials Inc (EXP): Free Stock Analysis Report
 
Jacobs Engineering Group Inc. (JEC): Free Stock Analysis Report
 
KB Home (KBH): Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI): Free Stock Analysis Report
 
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