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Jacobs Solutions Inc. (J), headquartered in Dallas, Texas, is a leading technical professional services provider. With a market cap of $19.3 billion, the company offers engineering and construction services, as well as scientific and specialty consulting for a broad range of clients, including companies, organizations, and government agencies.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and Jacobs Solutions perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the engineering & construction industry. Jacobs Solutions' market leadership stems from its comprehensive service offerings, robust brand, and diversified sector expertise, spanning water, transportation, healthcare, technology, and chemicals.
Despite its notable strength, J shares have slipped marginally from their 52-week high of $154.50, achieved on Mar. 28. Over the past three months, J stock has gained 10.1%, outperforming the S&P 500 Index’s ($SPX) 4.6% gains during the same time frame.
In the longer term, shares of Jacobs Solutions rose 18.7% on a YTD basis and climbed 16.5% over the past 52 weeks, underperforming SPX’s YTD gains of 20% and solid 31.9% returns over the last year.
Despite weak price momentum in the long term, J has been trading above its 50-day and 200-day moving averages since mid-September, indicating a bullish trend.
Jacobs Solutions' recent underperformance stems from delays in spinning off its Critical Mission Solutions and Cyber & Intelligence divisions, compounded by dependence on U.S. federal contracts amid budget uncertainty and rising costs due to inflationary pressures.
On Aug. 6, J shares closed up marginally after reporting its Q3 earnings results. Its adjusted EPS of $1.96 exceeded Wall Street expectations of $1.95. The company’s revenue stood at $4.2 billion, up 1.1% year over year. Jacobs Solutions expects full-year adjusted EPS to be between $7.85 and $8.05.
In the competitive arena of engineering & construction, TopBuild Corp. (BLD) has taken the lead over J, showing resilience with a 58.2% uptick over the past 52 weeks. However, BLD shares lagged behind J, with 6.4% gains on a YTD basis.
Wall Street analysts are moderately bullish on J’s prospects. The stock has a consensus “Moderate Buy” rating from the 13 analysts covering it, and the mean price target of $164.88 suggests a potential upside of 7% from current price levels.
On the date of publication, Neha Panjwani 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.
