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Investing.com - Truist Securities has maintained its Buy rating and $60.00 price target on KBR, Inc. (NYSE:KBR) following the termination of the company’s HomeSafe joint venture contract with the Department of Defense. According to InvestingPro data, KBR currently trades at $50.45 and appears undervalued based on its Fair Value analysis.
The HomeSafe contract, which managed military personnel home relocations, was terminated by the DoD, prompting Truist to adjust its financial projections for the engineering and construction firm. The research firm reduced its revenue estimates for KBR by 3% for fiscal year 2025 and 7% for fiscal year 2026. This aligns with InvestingPro data showing five analysts have recently revised their earnings estimates downward, though the company maintains a strong Buy consensus with a median price target of $66.50.
Truist also lowered its EBITDA forecasts for KBR, decreasing estimates by 1% for fiscal year 2025 and 3% for fiscal year 2026. Despite these reductions, the firm maintained its positive outlook on the stock. KBR’s current EBITDA stands at $684 million, with impressive revenue growth of 12.84% over the last twelve months. Get deeper insights into KBR’s financial health and growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro.
The research firm cited the removal of financial uncertainty as a key factor in its decision to reiterate the Buy rating, noting that the terminated contract would have a "relatively light impact" on the company’s expected EBITDA for both fiscal years 2025 and 2026.
Truist acknowledged potential reputational risk for KBR stemming from the contract termination announcement, though this concern did not alter its overall positive assessment of the company’s stock.
In other recent news, KBR announced a $161 million subcontract with Strategic Resources Inc. to provide resilience training services for the U.S. Army. This contract, which includes one base year and four option years, will see KBR deploying trainers at Army installations globally. Meanwhile, Goldman Sachs downgraded KBR’s stock rating from Buy to Neutral, citing the stock’s alignment with its price target and low visibility in certain business segments. Despite the downgrade, Goldman Sachs acknowledged KBR’s strengths in technology and strategic financial decisions.
Additionally, KBR has partnered with ACMI Properties to expand its space food capabilities in Houston, focusing on astronaut food systems development at NASA’s Exploration Park. This initiative aims to support the commercial low-Earth orbit industry by providing comprehensive food solutions for space missions. In another development, TRANSCOM terminated HomeSafe Alliance’s role in the Global Household Goods Contract, a joint venture operated by KBR. Despite this, KBR stated that the termination is not expected to materially affect its adjusted EBITDA outlook for 2025.
Orion Group Holdings (NYSE:ORN) also made headlines by appointing Alison Vasquez as their new Chief Financial Officer. Vasquez, who previously held leadership positions at KBR, brings over 25 years of experience in finance and accounting. Orion reiterated its 2025 full-year guidance, expecting revenues between $800 million and $850 million, with Adjusted EBITDA projected between $42 million and $46 million.
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