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Dallas, Texas-based Jacobs Solutions Inc. (J) is a global leader in providing consulting, engineering, technical, and project delivery services across multiple industries. With a market cap of $18.7 billion, the company operates through several key segments, offering specialized solutions in areas like cybersecurity, data analytics, and environmental remediation.
Shares of this engineering consulting firm have underperformed the broader market over the past 52 weeks. J has gained 11.5% during this period, contrasting with the S&P 500 Index's ($SPX) 27.5% rally. In 2024, Jacobs Solutions shares soared 15.6%, compared to SPX's 17.8% YTD gain.
Zooming in further, Jacobs Solutions' performance also lags behind the US Infrastructure iShares ETF (IFRA), which has recorded an 18.5% rise over the past 52 weeks. However, the stock has outpaced IFRA's 13% YTD increase.
Jacobs Solutions' underperformance over the past year stems from delays in the spin-off of its Critical Mission Solutions and Cyber & Intelligence Government Services segments. Additionally, the company's reliance on U.S. federal contracts amid budget concerns, coupled with inflation-driven cost pressures on fixed-price contracts, has further weighed on its stock performance.
However, the stock recovered marginally on Aug. 6 after its Q3 earnings report that surpassed expectations, driven by strong demand in its infrastructure services unit. This performance was notably supported by the U.S. government's $1 trillion infrastructure bill and strong performance in its People & Places Solutions unit.
For the current fiscal year, ending in September, analysts expect J's EPS to grow 10.7% year over year to $7.97. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters while missing on one other occasion.
The consensus rating among the 15 analysts covering the stock is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
On Aug. 7, Baird lowered Jacobs Solutions' price target to $160 but maintained an “Outperform” rating, citing strong P&PS margins and backlog in Q3.
The mean price target of $160.27 represents a premium of only 6.8% to J's current levels. The Street-high price target of $176 implies a modest potential upside of 17.3% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
