Jacobs (J) Allies With USNC to Develop New MMR Energy System
Jacobs Solutions Inc. J is set to act as a leading subcontractor to support the design and development of a new micro modular power reactor (MMR), provided by Ultra Safe Nuclear Corporation U.K. (USNC). The U.K. Department for Energy Security and Net Zero awarded a grant of up to $29 million for the development of the new MMR energy system.
Jacobs’ collaboration with USNC will ensure the construction of a U.K. demonstrator of the high-temperature gas-cooled reactor by the early 2030s, under the match funding by USNC. Jacobs will be supporting the front-end engineering design program for the demonstrator project that includes reactor analysis, refueling system, primary and secondary systems, safety systems, associated testing facilities, safety cases and other related overall system procedures, required for the delivery of the demonstrator model.
The new MMR energy system fulfils the highest safety standards and emits zero carbon during operations as it uses encapsulated TRi-structural ISOtropic particle fuel and is cooled by helium. Also, it is designed to support the transition from fossil fuels.
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Shares of Jacobs inched up 0.7% on Jul 20, during the trading session. Also, the stock has increased 5.7% in the past month, compared with the Zacks Technology Services industry’s 3.7% growth.
Strong Backlog Growth
Jacobs has been experiencing increased demand for consulting services in various sectors, including infrastructure, water, environment, space, broadband, cybersecurity and life sciences. The company's strong performance in recent quarters can be attributed to efficient project execution and the ongoing contract wins bear testimony to the fact. This is reflected in its solid backlog, which was $29 billion at the end of the second quarter of fiscal 2023, representing a 4% increase compared to the prior year.
Of the aforementioned backlog value, Critical Mission Solutions segment accounted for $8.14 billion, which provided strong visibility into the base business. People & Places Solutions accounted for $17.6 billion, driven by strong legislative drivers spending in federal, state and local initiatives.
Although foreign exchange risks, high costs and expenses are major concerns, Jacobs expects to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments in the upcoming period. This will help the company maintain positive momentum in the near term.
Zacks Rank & Key Picks
Jacobs currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Zacks Business Services sector are Copart, Inc. CPRT, Maximus, Inc. MMS and SPX Technologies, Inc. SPXC.
Copart currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CPRT delivered a four-quarter average earnings surprise of 5.6%. The company’s shares have risen 49.6% in the past year. The Zacks Consensus Estimate for CPRT’s fiscal 2023 sales and earnings per share (EPS) indicates growth of 9.2% and 10.3%, respectively, from the prior-year reported figures.
Maximus currently sports a Zacks Rank of 1. MMS has a four-quarter average earnings surprise of 9.6%. The stock has risen 35% in the past year.
The Zacks Consensus Estimate for MMS’s fiscal 2023 sales and EPS indicates growth of 7.7% and 1.1%, respectively, from the prior-year reported figures.
SPX Technologies currently carries a Zacks Rank #2 (Buy). SPXC has a trailing four-quarter earnings surprise of 28.4%, on average. Shares of the company have gained 43.6% in the past year.
The Zacks Consensus Estimate for SPXC’s 2023 sales and EPS indicates growth of 17% and 28.7%, respectively, from the year-ago reported levels.
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