Analyst: KBR Moving From Military To Energy Work

HARTFORD, Conn. (AP) — Shares of KBR Inc. rose Tuesday after an analyst raised his price target on the engineering and construction company's shares, saying KBR is moving successfully into large energy projects and away from military contracts.

Broadpoint AmTech analyst Will Gabrielski raised his price target to $29 from $24 and reiterated a "buy" rating on KBR.

The Houston company, which was spun off from Halliburton Co., is doing a "solid job of transitioning" its work from the Army's Logistics Civil Augmentation Program, or LogCap, though it took longer than expected, Gabrielski said.

Last month, defense contractors DynCorp International Inc. and Fluor Corp. received a combined $3 billion contract from the Army for support services to U.S. troops in Afghanistan. The award excluded KBR.

However, Gabrielski said two large Iraq orders could be awarded by the end of the year and KBR's "positioning in Iraq remains intact given the company's entrenched status."

KBR's position as a contractor on liquefied natural gas projects provides exposure to "one of the most active energy infrastructure markets," he said. In addition, KBR is working on one of the largest proposed petrochemical facilities in the world, he said.