Jacobs (J) will hold a new holding company structure from August 29


Shares of Jacobs Engineering Group Inc. J edged up 0.6% on August 19 after unveiling its plan for a new holding company structure from August 29.

The company will market itself as a global advanced technology solutions company. The parent company’s new name, Jacobs Solutions Inc., will replace Jacobs Engineering Group Inc. The internal transaction is intended to be tax-exempt for Jacobs and its shareholders for US federal income tax purposes. The plan will not affect ownership of Jacobs common stock for shareholders.

The new name will help strengthen the expansion of J’s business, including engineering and advanced technology products and services. Jacobs is used to implementing new business plans and strategies.

In November 2020, Jacobs launched the Focus 2023 initiative, with expected profits of more than $200 million from fiscal 2020. Through this initiative, the company has accelerated the adoption of digital technology across all facets of its operations. This move will include reducing 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 transformation initiative — which will provide Jacobs with the flexibility to invest materially in the business — will drive growth through technology solutions. The integration/transformation of Focus 2023 is expected to deliver double-digit adjusted EBITDA growth in fiscal year 2022.

Earlier, in November 2019, this leading engineering company announced the change of its stock symbol from JEC to J, with effect from December 10, 2019. Additionally, it launched its new brand globally global, which aimed to represent a global technology-driven solutions company. of an engineering and construction company.

Stock performance

Shares of J have outperformed Zacks Engineering’s R&D services industry over the past six months. The stock gained 15.7% during the said period compared to the industry’s 12.3% rally. Earnings estimates for fiscal 2022 suggest 10.3% year-over-year growth.

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Recently, the company released its results for the third quarter of fiscal 2022 (ended July 1, 2022). Its earnings and revenue exceeded their respective Zacks consensus estimate and improved year-over-year.

The good results are mainly attributable to substantial recurring revenues which are complemented by an acceleration of growth in the areas of Climate Response, Consulting & Advisory and Data Solutions. Additionally, strategic buyouts and the Focus 2023 initiative will likely accelerate its global integrated delivery of technology solutions. Going forward, an increased focus on repairing the country’s infrastructure will be a boon for Jacobs. Backlog level of $28.1 billion illustrates accelerating demand for Jacobs’ consulting services in infrastructure, water, environment, space, broadband, cybersecurity and life sciences.

Zacks ranking and key picks

Currently, Jacobs wears a Zacks rank #4 (sale). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some top ranked stocks worth a look in the construction sector include Arcosa AAFC, United rentals URIs and Primoris service company PRIM.

Arcosa – sporting a Zacks Rank #1 – is a manufacturer of infrastructure-related products and services serving the construction, energy and transportation markets.

ACA’s forecast earnings growth rate for fiscal 2022 is 7.8%. The Zacks consensus estimate for current-year earnings has improved 13.7% over the past 30 days.

United Rentals – currently carrying a Zacks Rank #1 – is the largest equipment rental company in the world.

URI’s projected earnings growth rate for 2022 is 43.5%. The Zacks consensus estimate for current-year earnings has improved 6.6% over the past 30 days.

Primoris – a Zacks Rank #2 (Buy) company – is a specialty contracting company operating in the United States and Canada. A strong backlog level of over $4 billion and strong contract awards in the Energy/Renewables and Utilities segments illustrate incredible momentum going forward despite supply chain and permitting challenges. Large-scale solar projects continued to drive growth in the Energy/Renewables segment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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