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Broadpoint.AmTech Upgrades Jacobs Engineering Group (JEC) to Buy

More News related to JEC

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February 3, 2010 11:53 AM EST

Broadpoint.AmTech upgrades Jacobs Engineering Group, Inc. (NYSE: JEC) to Buy, price target $45.

Broadpoint analyst says, "We believe Jacobs shares will perform well from current levels over the next 12 months as we find the risk/reward very attractive. Jacobs is a high-quality company and we believe the 18-month slow-down in new awards is within 2 quarters of coming to an end as macro trends improve and Federal money is spent. We believe 2010 will prove to be the trough year in terms of awards for Jacobs and we expect margin and EPS leverage to return as the economy recovers. At only 14.5X next year's earnings, we feel the downside risk is limited."

"We understand the bearish view on US refining trends; we have shared this concern and continue to expect a muted recovery in US downstream until jobless data improves. However, with most of the major US downstream companies having already reported capex for 2010, and Jacobs fully aware of the weakness when it provided guidance for 2010 ($2.00-$2.60), we do not see downstream as a head-\wind to current consensus expectations. We continue to expect a soft 2010 spending environment. A recovery would be more likely in 2011 assuming current trends persist. On the flip side, we continue to see opportunities on the maintenance/environmental budgets, and expect the current administration to act on carbon and sulfur either through an energy bill (unlikely in 2010) or through an EPA ruling (more likely; expect news flow early in the summer)."

To see all the upgrades/downgrades on shares of JEC, visit our Analyst Ratings page.