Jacobs (JEC) Secures New Contract From Shell Offshore

Renowned construction company Jacobs Engineering Group Inc. (NYSE:JEC) continues to strengthen its portfolio with a string of contract wins. In keeping with this strategy, the company recently secured a contract from Shell (LON:RDSa) Offshore Inc. for its Vito host project in the Gulf of Mexico.

The stock looks promising at the moment as it recorded an average return of 19.66% over the last 30 days. The average Zacks-categorized Engineering/Research & Development Services industry returned 16.16% over the same period.

Contract Details

Shell Offshore Inc. is a subsidiary of Royal Dutch Shell (RDS.A). Under the Vito project contract, Jacobs would provide its premium design package, front end and detailed engineering services for the topsides of the Vito host platform. The company’s comprehensive understanding of the deep-water production systems would enable it to offer a new less expensive design for the project.

We expect the deal to further strengthen Jacobs’ long-standing bond with Royal Dutch Shell.

Our Take

Jacobs’ stock was valued at $61.72 per share as of Nov 29, 2016. The stock has gained 4% since the fiscal fourth-quarter 2016 earnings release on Nov 22, 2016. The company’s quarterly earnings were in line with the Zacks Consensus Estimate.

Jacobs currently carries a Zacks Rank #3 (Hold). The company plans to improve its performance by streamlining operations, reducing costs and managing working capital more efficiently. In addition, Jacobs intends to reward its shareholders with lucrative share buyback offers. However, headwinds like unfavorable commodity and energy prices as well as a stronger U.S. dollar might raise concerns.

Stocks to Consider

Some better-ranked stocks in the industry are Willdan Group, Inc. (NASDAQ:WLDN) , MasTec, Inc. (NYSE:MTZ) and Comfort Systems USA, Inc. (NYSE:FIX) .

Willdan Group, Inc. delivered an average positive earnings surprise of 18.72% for the trailing four quarter. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MasTec, Inc. currently carries a Zacks Rank #2 (Buy). It posted an average positive earnings surprise of 61.27% for the trailing four quarters.

Comfort Systems USA, Inc. currently carries a Zacks Rank #2. The company delivered an average positive earnings surprise of 15.83%.

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