KBR
KBR Inc
Industrial/Transportation
12/04/2022
Presented
| Date | 11/28/2022 |
| Price | $51.57 |
| Market Cap | $7.08B |
| Ent Value | $8.27B |
| P/E Ratio | 47.95x |
| Book Value | $11.32 |
| Div Yield | 0.91% |
| Shares O/S | 137.20M |
| Ave Daily Vol | 1,252,368 |
| Short Int | 3.83% |
Current
| Price | $67.87 |
| Market Cap | $9.03B |
| KBR, Inc. engages in the provision of differentiated professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries. It operates through the following segments: Government Solutions, Technology Solutions, Energy Solutions, Non-strategic Business, and Other. The Government Solutions segment provides full life-cycle support solutions to defense, space, aviation, and other programs and missions for military and other government agencies. The Technology Solutions segment combines KBR's proprietary technologies, equipment, and catalyst supply and associated knowledge-based services into a global business for refining, petrochemicals, inorganic, and specialty chemicals as well as gasification, syngas, ammonia, nitric acid, and fertilizers. The Energy Solutions segment provides full life-cycle support solutions across the upstream, midstream and downstream hydrocarbons markets. The Non-strategic Business segment represents the operations or activities which the company intends to exit upon completion of existing contracts. The Other segment includes corporate expenses and general and administrative expenses not allocated to the business segments above. The company was founded on March 21, 2006 and is headquartered in Houston, TX. |
Publicly traded companies mentioned herein: Booz Allen Hamilton Holding Corp (BAH), KBR Inc (KBR), Leidos Holdings Inc (LDOS), Science Applications International Corp (SAIC)
Highlights
The presenter is long shares of KBR Inc (KBR), which has transformed itself from a low-quality E&C business to a government solutions and sustainable technologies company in recent years. He agrees with the market’s concern that the economy will worsen next year, earnings estimates will have to come down, and that market multiples remain high. To manage through this, he looks for high-quality compounders trading at a discount with positive upcoming inflections. These quality compounders aren’t common, especially at KBR’s valuation (11x consensus 2023 EBITDA), but he thinks KBR fits that description based on underappreciated tuck-ins and continued M&A runway. The timing seems attractive since most analysts aren’t modeling the positive benefit of HomeSafe to next year’s numbers, meaning estimates will need to increase.
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