KeyBanc analyst Sangita Jain reiterated a Sector Weight rating on KBR, Inc. (NYSE: KBR).

The analyst commented: "Another Activist Has an Idea to Unlock Value and Suggests a Sale; WSJ is reporting that Engine Capital has taken a 2% stake in KBR and is asking KBR to explore a sale since it believes KBR is currently undervalued. Engine Capital is suggesting that KBR could attract $48-$55/share from PE/ strategic buyers. KBR is currently in the process of spinning into two entities - its MTS and STS segments into two public companies. The spin has been in motion since KBR announced the intent last September. In December 2024, another activist, Irenic Capital, took a 1% stake in the Company with an aim to push KBR to sell its STS segment. We share our thoughts below.

Our thoughts: We think several ways of unlocking value have been explored. We just don't think selling the Company as one entity really makes sense given how disparate the two segments are (and we think that is why KBR resorted to splitting the Company in two). Irenic proposed spinning out the STS segment, but those efforts did not go far. We would think that KBR has on its own attempted to market portions or all of its MTS segment (there were unconfirmed reports that it tried to sell its RDT&E segment at one point). Our channel checks have indicated that selling MTS segment in one entity would be difficult given antitrust concerns, and we do not believe that KBR wants to break up MTS to sell it. At the end of the day, we think there probably are not that many options left and thus KBR's plan to split. Based on the timeline suggested by KBR, it is expecting to make the Form 10s public in June/July with investor days in September post Labor Day and the split 30–45 days thereafter."

For an analyst ratings summary and ratings history on KBR, Inc. click here. For more ratings news on KBR, Inc. click here.

Shares of KBR, Inc. closed at $36.02 yesterday.