KBR, Inc. KBR has inked a deal with AMUFERT to provide a technology license, proprietary engineering design, equipment and catalyst solutions for the latter’s 2,300 metric tons per day ammonia plant in Soyo, Angola.

The new facility will support Angola and nearby countries to accelerate sustainable agriculture with the help of KBR's proprietary technologies and expertise in ammonia. This will support AMUFERT's efforts toward greater food security and self-sufficiency in Angola.

KBR is a global leader in ammonia technology, renowned for its decades-long innovation in the ammonia industry. Since 1943, it has licensed, designed, or built more than 260 grassroots ammonia plants across the globe.

The demand for KBR’s technologies in ammonia for food productions, olefins for non-single-use plastics, refining for product diversification and more green solutions to meet tighter environmental standards has been going strong.

KBR’s Stock Performance

Shares of this company have underperformed the Zacks Engineering - R and D Services industry in the past six months. The stock has lost 7% against the industry’s 1.6% growth in the same time frame.

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KBR engages in a highly competitive sector. Macroeconomic concerns like interest rate hikes, global recession fears and sector-specific headwinds could result in overall negative sentiment in the stock market, especially in industries tied to energy and infrastructure development.

Nonetheless, earnings estimates for 2024 have moved up by 2 cents in the past 30 days, reflecting 12.4% year-over-year growth. Revenues are also likely to grow 9.2% year over year.

New and on-contract growth across its businesses and increased demand for sustainable services and technology are likely to benefit the company in the upcoming period.

KBR’s Solid Backlog Raises Hope for the Future

KBR’s strong project momentum stems from its resilient business model and efficiency-driven initiatives. The increasing global emphasis on national security, energy security, energy transition, and climate change has provided significant tailwinds. With over five decades of design engineering expertise across industries, KBR remains a leader in decarbonization efforts, utilizing innovative processes and low-carbon technologies to effectively reduce emissions.

KBR’s solid backlog and option level of $22.12 billion at the fiscal third quarter of 2024-end highlight its underlying strength. It received $3.3 billion in bookings and options in highly strategic areas with a trailing 12-month book-to-bill of 1.1x. Total revenues increased 10% to $1.95 billion year over year in the third quarter of 2024.

Particularly, revenues in the Sustainable Technology Solutions or STS segment rose 8% year over year to $457 million. Of the total backlog, STS segment contributed $3.8 billion.

Driven by the robust performance in its core business, KBR now expects total revenues in the band of $7.5-$7.7 billion compared with the prior expected range of $7.4-$7.7 billion.

The company now anticipates adjusted EBITDA between $840 million and $870 million compared with $825-$850 million expected earlier. Adjusted EPS is now projected to be within $3.20-$3.30 compared with the prior guided range of $3.15-$3.30.

KBR’s Zacks Rank & Key Picks

Currently, KBR carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space have been discussed below:

Sterling Infrastructure, Inc. STRL presently sports a Zacks Rank #1 (Strong Buy). Sterling Infrastructure has a trailing four-quarter earnings surprise of 21.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 9% and 33.3%, respectively, from the prior-year levels.

AECOM ACM presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 5.2%, on average.

The Zacks Consensus Estimate for ACM’s fiscal 2025 EPS indicates a rise of 12.8% from the prior-year levels.

Altair Engineering Inc. ALTR currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 20.8%, on average.

The Zacks Consensus Estimate for ALTR’s 2024 sales and EPS indicates a rise of 6.2% and 16.8%, respectively, from prior-year levels.

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