Jacobs Solutions Inc. Faces Market Challenges Despite Solid Earnings
Offering wide-ranging services, Jacobs Solutions Inc. has seen mixed performance in the stock market.
Jacobs Solutions Inc. (J), with a market capitalization of $15.8 billion, is involved in infrastructure, advanced facilities, and consulting. Based in Dallas, Texas, the company provides a variety of professional services, including consulting, technical, scientific, and project delivery for both government and private sectors.
Over the last 52 weeks, Jacobs’ shares have not kept pace with the broader market. While Jacobs has gained 7.1% during this period, the S&P 500 Index ($SPX) has jumped 20.7%. Year-to-date, Jacobs is down 3.4%, contrasting with SPX’s 2.2% gain.
Looking more closely, the performance gap widens when comparing Jacobs to the Industrial Select Sector SPDR Fund (XLI), which has returned 14.2% over the past 52 weeks and seen a 2.3% rise year-to-date.
On February 4, Jacobs announced its Q1 earnings results, reporting adjusted earnings of $1.33 per share. Although this marks an 8.3% decline compared to the previous year, it did beat analysts’ expectations by 3.1%. Revenue for the quarter increased by 4.4%, reaching $2.9 billion, also exceeding Wall Street estimates. A notable positive was the adjusted operating margin, which improved by 210 basis points, contributing to a robust 24.9% year-over-year increase in adjusted operating profit.
Despite these promising results, Jacobs’ stock dropped 3.5% on the day of the earnings announcement. An unfavorable tax comparison and softness in its advanced manufacturing sector likely contributed to investor concerns.
Looking ahead, analysts predict Jacobs’ earnings per share (EPS) will grow 14.6% year-over-year to $6.05 for the fiscal year ending in September 2025. The company’s history of exceeding Wall Street estimates is encouraging, as it has done so in each of the last four quarters.
Among 15 analysts covering Jacobs, the consensus rating is a “Moderate Buy,” based on seven “Strong Buys,” two “Moderate Buys,” and six “Hold” ratings.
As of now, Citi has maintained a “Buy” rating for Jacobs but reduced its price target to $160, indicating a potential upside of 24% from current levels.
Currently, Jacobs is trading below the average price target of $154.25, while the highest target of $176 suggests a notable upside potential of 36.4%.
On the date of publication, Neharika Jain did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.
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