CPChem Contract for Jacobs - Analyst Blog
June 20 2012 - 4:30AM
Zacks
Recently, Jacobs Engineering Group Inc. (JEC)
announced that it has been awarded a contract from Chevron Phillips
Chemical Company LP (CPChem). The contract entails providing front
end engineering and design (FEED) services for two polyethylene
facilities.
These two polyethylene facilities are part of CPChem's U.S. Gulf
Coast (USGC) Petrochemicals Project. They are expected to utilize
CPChem's proprietary Loop Slurry Technology and are planned to be
located in Old Ocean, Texas near the Chevron Phillips Chemical
Sweeny facility.
The contract is expected to strengthen Jacobs’ long standing
relationship with Chevron Phillips Chemical. Mike Autrey, Jacobs’
Group Vice President, was quite optimistic about their contribution
to the success of the U.S. Gulf Coast Petrochemical Project. The
contract value has not yet been disclosed.
Jacobs being a dominant player in engineering and construction
business is expected to benefit from its continuous contract
wins. We believe Jacobs’ flexible cost structure and
impressive track record of in-time project execution will help it
to retain its long-term relationships with its core clientele.
Also, these strategic contract wins are likely to fuel the
company’s expansion across geographies and services in the quarters
ahead.
Moreover, constant developments in the aviation, rail, water,
transit and telecom businesses as well as rapid growth in oil, gas
and mining industry are also likely to be a major growth driver for
the company. The company provides stiff competition to other
industry players including Fluor Corporation
(FLR) and Foster
Wheeler AG (FWLT).
We currently maintain a ‘Neutral’ recommendation on Jacobs. The
stock also bears a Zacks #3 Rank, which implies a short-term (1-3
months) ‘Hold’ rating.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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