Jacobs Engineering stock initiated with Buy rating at Goldman Sachs

Investing.com - Goldman Sachs initiated coverage on Jacobs Engineering Group Inc. (NYSE:J) with a Buy rating and a price target of $158.00, representing a potential 23% upside from the current price of $128.77. According to InvestingPro data, analysts’ price targets for Jacobs range from $130 to $180.

The investment bank views Jacobs as a leading engineering, design, and consulting firm with organic growth and margin expansion potential that ranks at the high end of its Engineering and Construction coverage universe.

Goldman Sachs projects a high single-digit organic revenue compound annual growth rate over 2025-2027 for Jacobs, driven by the water, power, life sciences, and data center end markets.

The firm sees potential for Jacobs to drive approximately 150 basis points of EBITDA margin improvement through 2028 as the company continues to implement global delivery, refine commercial models, and engage with clients earlier in projects, including higher-margin consulting work.

Jacobs shares have declined 17% over the past week amid investor debate regarding artificial intelligence’s long-term implications for the engineering and design industry, though Goldman Sachs believes this pullback is overdone. InvestingPro data confirms this sharp decline with a 14.49% drop in the past week, with technical indicators suggesting the stock is now in oversold territory. Trading at a P/E ratio of 49.91, Jacobs appears slightly undervalued according to InvestingPro’s Fair Value assessment. Investors seeking deeper insights can access the comprehensive Pro Research Report available for Jacobs, one of 1,400+ US equities covered in detail on the platform.

In other recent news, Jacobs Engineering Group Inc. reported strong financial results for the fourth quarter of 2025, with earnings per share (EPS) surpassing analyst expectations at $1.75, compared to the forecasted $1.67. The company also exceeded revenue projections, reporting $3.2 billion against a forecast of $3.15 billion. Jacobs’ backlog reached $23.1 billion, showing a 6% year-over-year growth and 2% above street expectations, with a book-to-bill ratio of 1.1x. Despite these positive results, Wells Fargo lowered its price target for Jacobs from $160.00 to $130.00, maintaining an Equal Weight rating due to industry concerns about artificial intelligence. Baird downgraded Jacobs from Outperform to Neutral, reducing its price target to $146.00, citing valuation concerns. KeyBanc, however, reiterated an Overweight rating with a price target of $170.00, noting that the recent sell-off appeared excessive. Bernstein also maintained an Outperform rating with a $163.00 price target, despite the stock’s recent decline. Additionally, there is speculation about a potential combination with WSP Global, with Baird estimating approximately 30% odds for a mostly stock-structured deal.

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