This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Why Jefferies Cut Its Price Target on KBR Inc

Stocks in this article: KBR

NEW YORK (TheStreet) -- Jefferies reiterated KBR Inc (KBR) as a "buy" but lowered its price target to $34 from $38.

Analyst Luke Folta said, "KBR reported 4Q results substantially below expectations, and were impacted by several charges (pre-tax total of $79mn). While the 2014 outlook wasn't any brighter, we still see KBR as one of the leading E&C players well positioned in the LNG and Petchem arena, benefiting from unprecedented activity levels."

Last week, the construction and engineering company recorded net income of 18 cents a share compared to 20 cents a share a year earlier.

"Earnings for the quarter were significantly less than anticipated," said CEO Bill Utt in a statement. Fourth-quarter guidance was not given in the third-quarter release.

Revenue tumbled 9.1% year over year to $1.7 billion. Analysts surveyed by Thomson Reuters had forecast revenue of $1.93 billion. This marks the eighteenth consecutive quarter of revenue declines.

Over fiscal 2014, management guides for earnings per share between $1.75 and $2.10. Analyst consensus was for $2.69 a share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

---------------------

TheStreet Ratings team rates KBR INC as a Hold with a ratings score of C+. 

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • KBR INC's earnings per share declined by 10.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KBR INC increased its bottom line by earning $1.54 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $1.54).
  • KBR, with its decline in revenue, slightly underperformed the industry average of 2.1%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Construction & Engineering industry. The net income has decreased by 10.0% when compared to the same quarter one year ago, dropping from $30.00 million to $27.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,488.84 +89.17 0.54%
S&P 500 1,919.99 +15.98 0.84%
NASDAQ 4,364.5770 +48.5030 1.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs