Jacobs (JEC) Wins PMC Services Deal From PEMEX Fertilizantes

Jacobs Engineering Group Inc. (NYSE:JEC) recently secured a contract from the Mexican fertilizer producer, PEMEX Fertilizantes, for providing Project Management Contract (PMC) services in the latter’s Ammonia IV Rehabilitation Project. As a PMC contractor, Jacobs will oversee the activities of the Engineering, Procurement and Construction contractor of the project.

The Ammonia IV Rehabilitation Project of PEMEX Fertilizantes will be based in its Cosoleacaque Petrochemical Complex at Veracruz, Mexico. The company has been rehabilitating this plant and its secondary facilities, in order to bring down the risks associated with unplanned shutdowns and abnormal operations. Moreover, this is anticipated to help restore the original operating design capacity of the facilities.

Jacobs noted that it would successfully and safely accomplish the PMC services of the project. Prior to this, the company has displayed an outstanding performance as the PMC service provider for the Minatitlan Refinery Reconfiguration Project.

Existing Scenario

Challenging energy market conditions, lackluster field services business and reduced public spending in the UK are expected to dent the near-term results for Jacobs. Notably, over the last month, the company’s shares lost 2.30%, wider than the 1.99% loss incurred by the industry.

In addition, over the last 30 days, the Zacks Consensus Estimate for Jacobs moved south for both fiscal 2017 and 2018, reflecting negative market sentiments.

However, this Zacks Rank #3 (Hold) company is poised to combat headwinds on the back of diligent business contracts and strategic restructuring moves. In addition, Jacobs recently (Aug 7, 2017) inked an agreement to acquire CH2M HILL Companies Ltd. (CH2M), in a bid to become a $15-billion global solutions provider. This transaction is likely to reinforce the company’s competency in the contemporary design, engineering, consulting and construction market, moving ahead.

Furthermore, we believe that the above mentioned deal will boost its organic growth trajectory in the near term.

Stocks to Consider

A few better-ranked stocks in the industry are listed below:

KB Home (NYSE:KBH) recorded an average positive earnings surprise of 12.47% over the trailing four quarters and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NVR, Inc. (NYSE:NVR) currently sports a Zacks Rank #1 and has an average positive earnings surprise of 14.19% for the last four quarters.

Potlatch Corporation (NASDAQ:PCH) also flaunts a Zacks Rank #1 and recorded an average positive earnings surprise of 41.16% over the past four quarters.

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