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On Tuesday, Goldman Sachs analysts adjusted their stance on KBR, Inc. (NYSE: KBR) shares, moving from a Buy to a Neutral rating. The firm also set a price target at $55.00, which sits within the broader analyst target range of $55-$78. According to InvestingPro data, KBR currently maintains a strong "GOOD" financial health score, despite the stock’s recent 7.6% decline over the past week. This change reflects the stock’s current trading level, which aligns with the analysts’ target.
Goldman Sachs acknowledged KBR’s strengths, specifically highlighting its "differentiated technology and track record of value-enhancing capital deployment." These attributes have been fundamental to KBR’s performance over time, reflected in its consistent dividend payments for 18 consecutive years and recent 10% dividend growth. InvestingPro analysis reveals several more key strengths, with additional insights available in the comprehensive Pro Research Report.
Despite the downgrade, the analysts maintained a positive view on the company’s technological edge and its strategic financial decisions. The company maintains healthy financials with a current ratio of 1.11 and generates substantial free cash flow. However, they noted that KBR’s stock price has already reached the target set by Goldman Sachs, prompting the shift in rating, though InvestingPro’s Fair Value analysis suggests the stock may still be undervalued.
The analysts also pointed out that certain segments of KBR’s business, particularly parts of its Mission Technology Solutions, have "relatively low visibility," which influenced their decision to recommend a more cautious investment approach at this stage.
KBR’s stock performance has been notably robust since it was added to Goldman Sachs’ Buy List on June 3, 2020, with gains of 114%. This increase outpaces the S&P 500’s rise of 89% during the same period. However, the analysts recognized that KBR’s stock has underperformed since November 2024, which was taken into consideration during the rating review.
In other recent news, KBR Inc (NYSE:KBR). reported its first-quarter 2025 financial results, revealing an adjusted earnings per share (EPS) of $0.98, which surpassed the forecast of $0.87. However, the company’s revenue came in at $2.05 billion, slightly below the expected $2.08 billion. Despite the earnings beat, the revenue miss highlights some challenges in meeting market expectations. KBR also declared a regular quarterly dividend of $0.165 per share, underscoring its commitment to returning value to shareholders. The company is set to pay this dividend on July 15, 2025, to shareholders recorded by June 13, 2025. In a move to expand its commercial space operations, KBR announced a partnership with ACMI Properties to develop a new facility for astronaut food systems at NASA’s Exploration Park in Houston. This 45,000 square-foot center aims to support NASA and its partners in ensuring astronaut safety and performance during space missions. Additionally, KBR’s strategic initiatives include a positive outlook for fiscal year 2025, with projected revenues between $8.7 billion and $9.1 billion, as well as anticipated adjusted EPS ranging from $3.71 to $3.95.
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