Recently, Jacobs Engineering Group Inc. (JEC) announced that it has received a two-year framework contract from the “Engineering Consortium” (EC) under an undisclosed value.
The consortium includes Iberdrola Ingenieria y Construccion S.A.U. along with its UK subsidiary, Tractebel Engineering from the GDF SUEZ Group.
The Engineering Consortium will be providing engineering and consultancy services to NUGENERATION LIMITED (“NuGen”) for the development of its new build nuclear power plant project in West Cumbria, United Kingdom. For this purpose, the consortium will support the project throughout in the areas of site investigation, site characterization, grid connection, and preliminary construction services among others.
Together with the consortium, Jacobs will ensure in-depth experience and relevant services to NuGen, supporting its business objectives. Jacobs’ contract terms with the consortium specified that the company will be providing environmental consultancy and engineering support to EC in the development of this major nuclear new build program in the UK.
Jacobs, one of the world’s largest and most diverse providers of technical, professional, and construction services, is well poised to take advantage of a strong secular infrastructure growth trend worldwide. Considering its low-cost position relative to its competitors, such as Fluor Corporation (FLR) and Foster Wheeler AG (FWLT), the company is likely to maintain sustainable, long-standing associations with its clients.
With this new framework contract, Jacobs seems to keep up with its acquisition/contract winning streak from federal and other clients. In the recent past, pricing per acquisition/contract has also improved in favor of Jacobs, wherein management sees potential for improving margins. Moreover, contracts continue to accelerate growth and expansion, providing room for Jacobs to diversify across markets, geographies and services.
We currently have a long-term ‘Neutral’ recommendation on the stock. Moreover, the company maintains a Zacks #3 Rank, which translates into a short-term (1-3 months) ‘Hold’ rating.
To read this article on Zacks.com click here.
Zacks Investment Research
