FWLT (MM)

Jacobs Engineering Group Inc. (JEC) entered into a five-year master services agreement (MSA) with Infineum, a leading manufacturer and seller of petroleum additives, for operations in Europe, Asia and North America. The value of the contract was not disclosed.

As per the agreement, Infineum’s manufacturing facilities in the U.S., France, Germany, U.K., Italy and Singapore is receiving Jacob’s engineering services. Services from Jacobs will aid Infineum's project development at its manufacturing locations.

California-based Jacobs Engineering is one of the leading providers of professional, technical and construction services to industrial, commercial and governmental clients. The company provides its services through offices and subsidiaries located principally in North America, Europe, Asia and Australia.

The company offers services in four areas: Construction Services, Project Services, Operations and Management, and Process, Scientific and Systems consulting.

We believe Jacobs’ diversification across markets, geographies and services with a number of new contracts will help it to generate growth in future. Jacobs’ diversification across markets, geographies and services will also help it to generate growth in a sluggish environment. The diversified business of the company will help it to expand in future through new contracts. The company also plans to expand into the emerging markets like India, China and the Middle East, which are expected to perform much better than the developed markets in the coming years.

However, the company faces immense risk as it operates in a highly competitive market. Major competitors of Jacob’s are  Fluor Corporation (FLR) and Foster Wheeler AG (FWLT). We currently maintain our Neutral recommendation on Jacobs Engineering Group, with a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.

 
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