Jacobs Engineering (JEC) Upgraded To Buy On Bright Prospects

On Apr 11, Zacks Investment Research upgraded Jacobs Engineering Group Inc. (NYSE:JEC) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold). Going by the Zacks model, companies holding a Zacks Rank #2 have chances of performing better than the broader market in the quarters ahead.

Jacobs’ stock looks promising at the moment. Over the last one year, shares of this Zacks Rank #2 stock yielded a return of 31.44%, outperforming 19.25% growth recorded by the Zacks categorized Engineering/R & D Services industry.

Why the Upside?

Donald Trump’s plans to boost infrastructure spending in the U.S., and recovering economic conditions of the major industrial end markets in China are anticipated to drive demand for Jacobs’ non-imitable engineering and construction management services, moving ahead.

From second-quarter fiscal 2016, Jacobs segregated its operating and reporting structure into four major business segments. The move is streamlining the company’s operations and is likely to boost commercial growth for its business over the long term.

Notably, Jacobs is steadily reinforcing its business and brand status on the back of organic growth initiatives. In the last few months, the company secured several contracts from renowned private companies, and public sector agencies like ONEgas, Fucheng Investment Australia and Oxea Corporation. Such lucrative deals are expected to bolster the company’s revenues in the near term. It should also be noted that higher transportation spending of the government authorities of Australia, the UK and the U.S. has largely increased Jacobs’ contract winning opportunities for the near term.

In addition, Jacobs is highly committed toward its shareholders, and intends to provide higher returns via lucrative share repurchase and dividend programs.

Other Stocks to Consider

A few other stocks worth considering in the industry are listed below:

Boise Cascade Company (NYSE:BCC) has an outstanding average positive earnings surprise of 517.51% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

TopBuild Corp. (NYSE:BLD) boasts a Zacks Rank #1 and has a positive average earnings surprise of 27.38% for the trailing four quarters.

Dycom Industries, Inc. (NYSE:DY) also flaunts a Zacks Rank #1 and generated an average earnings surprise of 17.30% in the past quarters.

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