Valued at a market cap of $17.1 billion, Jacobs Solutions Inc. (J) stands as a prominent force in providing consulting, technical, engineering, and project delivery services to various industries. The company serves both government and private sectors globally, offering innovative expertise in cybersecurity, data analytics, design, and environmental remediation.
Stock Performance Shows Strong Gains
Over the past 52 weeks, shares of the Dallas-based company have outperformed the general market. Notably, J stock has surged nearly 33% compared to the broader S&P 500 Index ($SPX) which has increased by 31%. In 2024, shares of J have risen approximately 27%, while the S&P has gained 25.2% year-to-date.
Comparative Performance Against Sector Peers
Despite these strong numbers, Jacobs Solutions has not kept pace with the Industrial Select Sector SPDR Fund’s (XLI) impressive 34.5% return in the same period. However, the company’s stock has slightly surpassed XLI’s 25.1% year-to-date increase.
Market Reaction to Recent Earnings Report
On November 19, shares of Jacobs Solutions dropped 4.9% after the company reported mixed results for its Q4 fiscal 2024. Revenue reached about $3 billion, missing consensus estimates, but nonetheless showed a 4.4% year-over-year increase. Investor sentiment was affected by concerns regarding temporary challenges in the life sciences and advanced manufacturing sectors, particularly due to an EV battery manufacturer’s bankruptcy. While adjusted EPS of $1.37 slightly exceeded estimates, investor caution lingered over the separation of Critical Mission Solutions from parts of Divergent Solutions and its potential long-term effects.
Future Earnings and Analyst Ratings
For the current fiscal year ending in September 2025, analysts anticipate that J’s EPS will grow nearly 15% year-over-year to $6.07. The company’s earnings surprise history has been encouraging, as it has exceeded consensus estimates in the last four quarters.
Among the 14 analysts covering Jacobs Solutions, the consensus rating is a “Moderate Buy.” This rating consists of seven “Strong Buy” recommendations, two “Moderate Buys,” and five “Holds.” This situation reflects a slight decline in bullish sentiment since three months ago when there were eight “Strong Buy” ratings.
Price Target Adjustments
On November 21, RBC Capital analyst Sabahat Khan adjusted Jacobs Solutions’ price target to $152, while keeping an “Outperform” rating, indicating that Q4 results and FY25 guidance met expectations. Investor focus is now shifting towards the upcoming investor day in February for updates on the medium-term strategy.
As of now, J is trading below the average price target of $158.20, with the highest projected price target at $180, suggesting a potential upside of 31% from its current position.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information included is designed solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
