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KBR Lifts 2025 Long-Term Expectations on HomeSafe Alliance
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KBR, Inc. (KBR - Free Report) has updated its 2025 long-term financial targets, depicting expected benefits from the HomeSafe alliance joint venture.
HomeSafe Alliance LLC — a joint venture between KBR and Tier One Relocation — secured a contract in November 2021 to improve the Department of Defense's military and civilian personnel’s domestic and international relocation experience. KBR holds a 72% ownership stake in HomeSafe.
The contract, with a ceiling value of $20 billion, is expected to aid KBR with "strong" earnings and cash accretion as well as an increased funding source diversification.
Updated Long-Term View
KBR has lifted its 2025 guidance to reflect continued business momentum. The company expects revenues to reach $9.5 billion, up 19% from the earlier expectation of $8 billion. This reflects a CAGR of 12-14% for the 2021-2025 period.
Adjusted EBITDA is expected to be $925 million for 2025, with an EBITDA margin of 10%. This reflects a 16% increase from its earlier expectation of $800 million and a CAGR of 12-14%.
KBR expects to deliver adjusted EPS of $4.75 in 2025 (reflecting a CAGR of 20-25%), free cash flow per share of $4.75, ROIC of 14-16% and an effective tax rate of 24-25%.
Share Price Performance
Image Source: Zacks Investment Research
KBR’s solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses. KBR’s shares have gained 38.1% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s 1.5% rise.
Fluor Corporation (FLR - Free Report) : Fluor — a Zacks Rank #1 company — is gaining from the "Building a Better Future" initiative, which is focused on enhancing markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline, and high-performing business culture. It made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.
Fluor’s earnings for 2022 are expected to grow 42.6%. FLR’s earnings estimates have increased to $1.34 per share from $1.12 over the past 30 days.
Sterling Construction Company, Inc. (STRL - Free Report) : Sterling — a Zacks Rank #1 company — has been benefiting from broad-based growth across the E-Infrastructure, Building and Transportation solutions segments.
Sterling’s earnings for fiscal 2022 are expected to grow 20.6%. ACM’s earnings estimates for the year have increased to $3.40 from $3.35 over the past 30 days.
AECOM (ACM - Free Report) : AECOM — a Zacks Rank #2 company — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.
AECOM’s earnings for fiscal 2022 are expected to grow 33%. STRL’s earnings estimates for 2022 have increased to $2.86 from $2.63 over the past 30 days.
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KBR Lifts 2025 Long-Term Expectations on HomeSafe Alliance
KBR, Inc. (KBR - Free Report) has updated its 2025 long-term financial targets, depicting expected benefits from the HomeSafe alliance joint venture.
HomeSafe Alliance LLC — a joint venture between KBR and Tier One Relocation — secured a contract in November 2021 to improve the Department of Defense's military and civilian personnel’s domestic and international relocation experience. KBR holds a 72% ownership stake in HomeSafe.
The contract, with a ceiling value of $20 billion, is expected to aid KBR with "strong" earnings and cash accretion as well as an increased funding source diversification.
Updated Long-Term View
KBR has lifted its 2025 guidance to reflect continued business momentum. The company expects revenues to reach $9.5 billion, up 19% from the earlier expectation of $8 billion. This reflects a CAGR of 12-14% for the 2021-2025 period.
Adjusted EBITDA is expected to be $925 million for 2025, with an EBITDA margin of 10%. This reflects a 16% increase from its earlier expectation of $800 million and a CAGR of 12-14%.
KBR expects to deliver adjusted EPS of $4.75 in 2025 (reflecting a CAGR of 20-25%), free cash flow per share of $4.75, ROIC of 14-16% and an effective tax rate of 24-25%.
Share Price Performance
Image Source: Zacks Investment Research
KBR’s solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses. KBR’s shares have gained 38.1% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s 1.5% rise.
Zacks Rank & Key Picks
Currently, KBR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fluor Corporation (FLR - Free Report) : Fluor — a Zacks Rank #1 company — is gaining from the "Building a Better Future" initiative, which is focused on enhancing markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline, and high-performing business culture. It made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.
Fluor’s earnings for 2022 are expected to grow 42.6%. FLR’s earnings estimates have increased to $1.34 per share from $1.12 over the past 30 days.
Sterling Construction Company, Inc. (STRL - Free Report) : Sterling — a Zacks Rank #1 company — has been benefiting from broad-based growth across the E-Infrastructure, Building and Transportation solutions segments.
Sterling’s earnings for fiscal 2022 are expected to grow 20.6%. ACM’s earnings estimates for the year have increased to $3.40 from $3.35 over the past 30 days.
AECOM (ACM - Free Report) : AECOM — a Zacks Rank #2 company — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.
AECOM’s earnings for fiscal 2022 are expected to grow 33%. STRL’s earnings estimates for 2022 have increased to $2.86 from $2.63 over the past 30 days.