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Jacobs' JV to Offer EPCM Services for Western Sydney's USCN Program

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The joint venture (JV) between Jacobs Solutions Inc. (J - Free Report) and Seymour Whyte has won a contract from Sydney Water, the statutory corporation owned by the government of New South Wales.

Per the contract, the JV will offer Engineering, Procurement and Construction Management (EPCM) services for the Upper South Creek Networks (USCN) program in Western Sydney.

J stock gained 2.1% during the trading hours on Wednesday after the contract win announcement.

Details on Jacobs’ New Award Win

The USCN program is considered to be essential as Upper South Creek is considered one of Sydney's fastest-growing regions. The region is expected to have 90,000 new dwellings and create 200,000 new jobs. With such advancement and increased region population, wastewater management becomes a crucial deal, thereby making wastewater infrastructure investment critical for growth and development.

The USCN program will utilize an integrated delivery model to plan, procure, design, build and deliver resilient, affordable and sustainable wastewater services to the Upper South Creek catchment. The development contract undertaken between the Jacobs-Seymour JV and Sydney Water will ensure the region’s residents receive safe, reliable and affordable services as the area continues to grow and develop.

As part of the transformative water management contract, the USCN program will ensure the delivery of wastewater pipelines stretching up to 60 miles. Also, it will establish nine pumping stations across five precincts in the Upper South Creek catchment to transfer flows to the Jacobs-GHD-designed Advanced Water Recycling Centre, which is currently under construction.

Increasing Backlog Driving J’s Growth

Jacobs’ efficient project execution has increased the demand for its consulting services in various sectors, including infrastructure, water, environment, space, broadband, cybersecurity and life sciences.

The aforementioned statement is supported by the company’s ongoing backlog growth. At the fiscal third-quarter end, it reported a backlog of $30.6 billion, up from $28.9 billion in the year-ago period. This reflects persistent solid demand for Jacobs' consulting services. Of this backlog, P&PS backlog was $19.28 billion compared with $17.5 billion in the comparable year-ago period, primarily driven by growth in the Life Sciences and Energy markets.

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Shares of this professional, technical and construction services provider have gained 8.8% in the year-to-date period compared with the Zacks Technology Services industry’s 33% growth. The prospects are marred due to ongoing inflationary pressures of labor, materials and restructuring expenses, along with unfavorable foreign currency translation and current market uncertainties. However, Jacobs is expected to benefit from strong global trends in infrastructure modernization, energy transition and national security, along with a potential super-cycle in global supply-chain investments in the upcoming period.

J’s Zacks Rank & Key Picks

Jacobs currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Business Services sector.

Limbach Holdings, Inc. (LMB - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LMB delivered a trailing four-quarter earnings surprise of 67.9%, on average. The Zacks Consensus Estimate for LMB’s 2024 sales and earnings per share (EPS) indicates growth of 1.3% and 38.1%, respectively, from the prior-year levels.

Sezzle, Inc. (SEZL - Free Report) presently sports a Zacks Rank of 1. SEZL has a trailing four-quarter earnings surprise of 158.3%, on average.

The Zacks Consensus Estimate for SEZL’s 2024 sales and EPS indicates growth of 38.6% and 436.8%, respectively, from the year-ago period’s levels.

DocuSign, Inc. (DOCU - Free Report) currently sports a Zacks Rank of 1. DOCU delivered a trailing four-quarter earnings surprise of 18.3%, on average.

The Zacks Consensus Estimate for DOCU’s fiscal 2024 sales and EPS indicates growth of 6.5% and 15.8%, respectively, from the prior-year levels.

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