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HOUSTON - Engineering firm KBR (NYSE:KBR) has been selected by ENKA İnşaat ve Sanayi A.Ş. to provide detailed engineering design services for the Associated Gas Upstream Project Phase 2 in Iraq's Basra region, according to a press release statement. The $5.4 billion market cap company, currently trading near its 52-week low at $42.77, is considered undervalued according to InvestingPro analysis, with analysts setting an average price target suggesting 44% upside potential.
The project is part of the Gas Growth Integrated Project operated by TotalEnergies alongside partners BOC and Qatar Energy. KBR previously completed the Front-End Engineering Design for the same development.
Under the agreement, KBR will deliver multi-discipline detailed engineering design from its global engineering centers to support ENKA's execution of the engineering, procurement, supply, construction, and commissioning scope for the central processing facility.
The AGUP2 project, scheduled to begin in 2028, aims to process oil and associated gas from the Ratawi oil field. The facility is designed to increase production capacity to 210,000 barrels per day of oil and 154 million standard cubic feet per day of gas, while working to eliminate routine flaring.
"This project represents a strategic milestone for Iraq's energy future," said Jay Ibrahim, President of KBR Sustainable Technology Solutions, noting that it combines gas recovery, power generation, oil field redevelopment, and renewable energy investment. Despite KBR's weak gross profit margins of 14.36%, the company has maintained strong financial health with $413 million in levered free cash flow over the last twelve months.
The broader Gas Growth Integrated Project includes the recovery of gas currently flared at three oil fields in southern Iraq, construction of a 1 GWac solar farm, and a seawater treatment plant. The initiative is designed to enhance Iraq's natural resources development and improve the country's electricity supply.
KBR has operated in Iraq for more than four decades and employs approximately 37,000 people across 29 countries. The company has maintained dividend payments for 18 consecutive years and raised its dividend for 6 consecutive years, demonstrating financial stability with a P/E ratio of 13.63, considered low relative to its growth prospects. InvestingPro offers additional insights through its comprehensive Pro Research Report, one of 1,400+ available for top US equities, providing clear, actionable intelligence for smarter investing decisions.
In other recent news, KBR Inc. reported its third-quarter 2025 earnings, revealing mixed results. The company exceeded expectations with an earnings per share (EPS) of $1.02, surpassing the forecasted $0.96. However, its revenue of $1.93 billion fell short of the anticipated $1.98 billion. Additionally, KBR announced a significant development with its joint venture, Brown & Root Industrial Services, signing a definitive agreement to acquire Specialty Welding and Turnarounds. This acquisition is set to establish one of the largest specialty welding and turnaround service providers in North America. In another development, KBR secured a contract to provide detailed engineering services for QatarEnergy's Bul Hanine oil and gas field. Truist Securities has also raised its price target for KBR to $62 from $60, maintaining a Buy rating on the stock. These developments highlight KBR's strategic moves in the engineering and industrial services sectors.
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