RBC lifts Jacobs Engineering stock target to $154, keeps Outperform

On Wednesday, RBC Capital analysts adjusted their outlook on Jacobs Engineering Group Inc. (NYSE:J), increasing the price target to $154 from the previous $152 while reaffirming the Outperform rating. The revision comes in light of the company’s potential for improvement in the second half of the fiscal year. With a current market capitalization of $14.4 billion and trading at a P/E ratio of 49.9x, Jacobs sits at the higher end of its valuation range. InvestingPro analysis shows the stock is currently trading near its Fair Value, with analyst targets ranging from $123 to $175.

Jacobs Engineering reported Adjusted Operating Income that fell short of consensus estimates, influenced by a reserve set in the Water business. Despite this, management has confirmed the fiscal 2025 guidance. The company is anticipated to see sequential revenue growth in the third and fourth quarters of the fiscal year, which is expected to align with its full-year projections. According to InvestingPro data, the company maintains strong financial health with a current ratio of 1.5, indicating solid liquidity. Revenue grew by 35.4% in the last twelve months, with analysts forecasting 5% growth for fiscal 2025.

The RBC Capital analyst emphasized the company’s prospects for the latter half of the fiscal year, stating, "Positioned for H2 improvement." The analyst also noted that the reiteration of the Outperform rating reflects confidence in the company’s trajectory to meet its annual goals.

The new price target reflects a modest increase, with the analyst justifying the adjustment: "Revising price target +$2 to $154; reiterating Outperform." This increment suggests a positive outlook on the company’s ability to recover and progress towards its stated objectives.

The report from RBC Capital underscores Jacobs Engineering’s strategy to navigate through the current fiscal year, with an expectation of revenue improvement in the coming quarters. The company’s management remains focused on achieving its full-year outlook, as indicated by the maintained guidance for fiscal 2025.

In other recent news, Jacobs Engineering Group Inc. reported its second-quarter earnings for 2025, revealing an adjusted earnings per share (EPS) of $1.43, which surpassed analyst expectations of $1.39 by approximately 2.88%. However, the company faced a revenue shortfall, reporting $2.91 billion against the anticipated $3 billion. Despite the revenue miss, Jacobs Engineering’s backlog increased significantly by 20% to $22.2 billion, indicating strong demand for its services. Bernstein analysts maintained an Outperform rating for Jacobs Engineering with a price target of $144.00, emphasizing the company’s positive outlook. Jacobs Engineering reaffirmed its full-year 2025 guidance, projecting mid to high single-digit revenue growth and an EBITDA margin of 13.8-14%. The company expects sequential revenue growth of 5-7% in the upcoming quarter, supported by its strong backlog and strategic investments in key sectors. Jacobs Engineering is optimistic about its prospects in the life sciences and water sectors, although it noted some project delays.

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