Jacobs Engineering Group Inc. JEC recently secured a designing contract for a new rail link from Network Rail, for an undisclosed amount. The year-long deal is expected to leverage Jacobs’ brand value in the industry and thereby boost its organic growth.
Contract Insights
Network Rail runs, maintains and develops railway tracks, viaducts, signaling, bridges, tunnels and level crossings in Britain. Backed by innovative technologies and efficient workforce, the company aims to improve Britain’s commercial life through superior, faster and more frequent rail networking facilities.
Network Rail has planned to construct a new rail link, connecting London Heathrow airport to west of England. With this project, the company not only intends to enhance railway connectivity between South Wales and Thames Valley, but also, albeit indirectly, plans to lower carbon dioxide emissions that are continuously increasing due to heavy road transports.
As part of project implementation, Jacobs would provide a design for the rail link Development Consent Order of Network Rail. The consent will likely be submitted at the beginning of 2016. Apart from working out the design, Jacobs requires to provide an environmental surveys and impact assessment (“EIA”) result for evaluating optimization of tunnel routes and locations of the new railway lines. The EIA plan is also responsible for ensuring environmental safety and sustainability during the construction process.
The new railway link would be effective from 2021 onwards, provided Development Consent Order of Network Rail is approved in 2016. Jacobs would aid the process of approval by providing tangible solutions for the construction plan.
Moving Forward
Jacobs is one of the most popular technical services providers in the global forum. It offers professional, technical and construction services to diversified public, industrial and commercial clients. We believe that approval of Western Rail Access plan would serve to reflect Jacobs’ expertise in the construction field, and hence reinforce its organic growth in the long run.
With a market capitalization of $5.79 billion, Jacobs currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Willdan Group, Inc. WLDN, Pernix Group Inc. PRXG and The ADT Corporation ADT. While both Pernix Group Inc. and The ADT Corporation hold a Zacks Rank #2 (Buy), Willdan Group, Inc. sports a Zacks Rank #1 (Strong Buy).
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