Zacks Investment Research downgraded shares of Jacobs Engineering Group Inc. (JEC) from NEUTRAL to UNDERPERFORM on August 06, 2014, with a target price of $45.00.
Jacobs Engineering reported improved year over year results for fiscal third-quarter 2014. While adjusted earnings increased by a penny to $0.84, revenues recorded a hike of roughly 5% to $3.23 billion, year over year. However, the company recorded negative tax impacts from the restructuring activities to the extent of $0.35 per share. The same is expected to adversely impact earnings in fiscal fourth quarter of 2014. Further, Jacobs' overdependence on third-party dealers for supply of raw materials might lead to a hefty loss if these customers are not able to fulfill the demand. Also, changes in government spending and economic scenario in the international markets may mar the company's performance. Based on these factors, we downgrade our recommendation on the stock to Underperform from Neutral.
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