BUY OR SELL-Is Jacobs Engineering a near-term buy?

lunes 30 de marzo de 2009 19:23 CEST

By A.Ananthalakshmi

BANGALORE, March 30 (Reuters) - Jacobs Engineering Group's (JEC.N: Cotización) shares have seen some sharp swings in the past one year -- they dropped to a three-year low in November, but have doubled since then.

Analysts have a largely positive recommendation on the stock but does it warrant an immediate buy even at the risk of more project cancellations? Or can one wait for it to get cheaper?

Pasadena, California-based Jacobs, which serves the oil and gas, energy, refining, and infrastructure markets, has been having some recent troubles with backlog cancellations and delays.

It removed about $840 million from backlog in its latest first quarter due to project cancellations and some projects have been delayed as well. Jacobs is at the receiving end of capex cut at oil sands clients, including Suncor Energy (SU.TO: Cotización).

Analysts say Jacobs will be hit by the reported slowdown of Motiva's Port Arthur refinery expansion. [ID:nN23314144]

It might not benefit much from the stimulus plan as only a small part of its business (about 12 percent) is exposed to related contracts.

But about eight analysts tracking the stock still recommend a "buy" or an equivalent rating, while only 3 analysts hold a "sell." Five maintain a "hold" rating.

Price targets vary between $28 and $61, while the stock currently trades just below $40.   Continuación...