Yahoo Finance Jacobs (J) Wins DaRTS Framework Contract, Fortifies P&PS
Jacobs Engineering Group Inc. J received a Development and Regeneration Technical Services (DaRTS) framework contract from Homes England to support the U.K. government's housing acceleration in the country.
Per the contract, Jacobs will provide a full multidisciplinary built environment as well as professional and technical services to Homes England and other public sector bodies till 2027.
Jacobs’ People & Places Solutions’ (P&PS) senior vice president of Europe, Kate Kenny, stated, "To achieve sustainable housing growth and thriving communities, we must respond in ways that prioritize thoughtful legacy outcomes, create social value and address decarbonization needs."
J’s shares slipped 3.13% on May 31 and have lost 9.5% in the past three months compared with the Zacks Technology Services industry’s 0.7% decline. Nonetheless, earnings estimates for fiscal 2023 suggest 6.2% year-over-year growth.
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Although foreign exchange risks and high costs and expenses are major concerns for the company, solid performance across the portfolios and robust backlog are likely to boost investors’ sentiment in the near future.
Solid Project Execution to Drive Growth
Jacobs is witnessing a rising demand for infrastructure, water, environment, space, broadband, cybersecurity and life sciences consulting services. Also, it has been creating smart and connected spaces and places to support diverse regeneration and development projects, like a feasibility study for Rikers Island and The Ellinikon development in Greece.
Efficient project execution has been a key factor driving Jacobs’ performance over the last few quarters. The company’s solid backlog level is a testimony to this fact. Jacobs’ backlog at the end of second-quarter fiscal 2023 amounted to $29 billion, up 4% from a year ago.
Jacobs’ P&PS segment (accounting for 57.7% of the total revenues in fiscal 2022) serves clients from broader sectors like water, transportation, building and semiconductors and acts as a major contributing business segment. The segment has solid prospects, given its overall higher sales pipeline.
The P&PS backlog at fiscal second-quarter end was $17.6 billion, up from $16.9 billion a year ago. The P&PS segment’s overall sales pipeline remains solid as climate change, decarbonization and social value gain momentum across sectors.
Jacobs’ Focus 2023 initiative entails more than $200 million in benefits versus fiscal 2020. Through this initiative, the company has been accelerating the adoption of digital technology across all facets of operations. This move will reduce the physical real estate footprint by more than 30% as it significantly shifts to a more flexible and virtual workforce.
Jacobs expects that by 2023, this transformative initiative will drive growth through technology-enabled solutions, giving it with the flexibility to materially invest in the business.
Zacks Rank & Key Picks
Currently, Jacobs carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Business Services sector are Inspired Entertainment, Inc. INSE, Amplitude, Inc. AMPL and SPS Commerce SPSC.
Inspired Entertainment’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average being 19.02%. INSE currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for INSE’s 2023 earnings and revenues suggests an improvement of 42.9% and 20.4%, respectively, from the 2022 estimate. The consensus mark for INSE’s 2023 earnings has moved north in the past 30 days.
Amplitude’s revenues and earnings for the current year are likely to rise by 12.4% and 114.3%, respectively, from the year-ago reported figure. San Francisco, CA-based AMPL has witnessed an upward estimate revision in the past 30 days.
AMPL’s earnings beat estimates in each of the last four quarters, the average being 38.5%. It currently carries a Zacks Rank #2 (Buy).
SPSC Technologies carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 16.4%, on average. Shares of SPSC have increased 54% in the past year.
The Zacks Consensus Estimate for SPSC’s 2023 sales and EPS indicates a rise of 17% and 14%, respectively, from the year-ago period’s levels.
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