Jacobs Engineering Has Been a Super Stock in 2016



Analysts’ recommendations on Jacobs Engineering

Among the ratings listed in Thomson Reuters, ten analysts have a hold rating on Jacobs Engineering (JEC). Five analysts have a “buy” rating and two have a “sell” rating on the stock.

The average 12-month target price on Jacobs Engineering rose from $47 at the beginning of the year to $56.5 as of November 22, 2016. Compared to the company’s current market price of $59.32, it represents a return potential of -4.7%.

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Pricing multiple and YTD returns

Investors who took positions in Jacobs Engineering stock at the beginning of the year would have earned a solid YTD (year-to-date) return of 41.5% on their investments by November 22. During the same period, the S&P 500 fetched 9.4% in capital gains. Before Trump’s election, the stock yielded 19.3% in capital gains to investors. Therefore, in a short period of around 13 days, Jacobs Engineering more than doubled its returns this year.

Among competitors and players in a similar industry, Aecom (ACM) yielded 24.3% during the same period. The returns for Fluor Corporation (FLR) at 10.7% are barely above the S&P 500 returns this year.

The trailing 12-month pricing-to-earnings ratio for Jacobs Engineering is high at 33.5x. In comparison, players in the same industry are trading at even higher multiples. For example, Aecom is trading at 59.7x, while Fluor is trading at 46.2x.


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