KBR, Inc.
KBR
$35.13
+0.83%
KBR, Inc. is a global provider of technology, integrated engineering, procurement, and construction (EPC) delivery, and operations and maintenance services, operating primarily in the engineering and construction industry. The company is organized into two segments: Mission Technology Solutions (MTS) and Sustainable Technology Solutions (STS), positioning it as a diversified player serving government and commercial clients across defense, energy, and industrial markets. KBR's distinct competitive identity lies in its ability to combine high-tech solutions with large-scale project execution, supported by a workforce of approximately 36,000 employees across 30+ countries. The current investor narrative centers on KBR's strategic pivot toward sustainable technologies and government services, underscored by recent contract wins such as the $8 billion Antarctica contract and the Basra oil deal, which highlight long-term revenue visibility but also raise questions about margin sustainability and execution risk in a volatile macro environment.…
KBR
KBR, Inc.
$35.13
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Investment Opinion: Should I buy KBR Today?
Based on the data, KBR is rated a 'Buy' with a consensus target price of $45.86, implying 25.3% upside from the current price of $36.61. The thesis is that KBR's undervaluation—forward P/E of 8.97x and PEG of 0.84x—combined with a robust backlog from mega-contracts, will drive an earnings recovery that the market has not yet priced in. The analyst consensus is 'Buy', and recent upgrades from Citigroup and Truist Securities reinforce this view.
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KBR 12-Month Price Forecast
The AI assessment leans bullish, driven by compelling valuation metrics and a strong backlog. The forward P/E of 8.97x and PEG of 0.84x suggest the market is pricing in a significant earnings recovery, which is supported by the $8 billion Antarctica contract. However, the recent revenue decline and high debt load temper confidence. If revenue growth turns positive and margins stabilize, the stock could re-rate significantly. Conversely, if the decline persists, the bear case would gain traction. The stance would be upgraded to high confidence if Q1 2026 shows revenue growth, and downgraded to bearish if revenue declines accelerate or major contracts are cancelled.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on KBR, Inc.'s 12-month outlook, with a consensus price target around $44.29 and implied upside of +26.1% versus the current price.
Average Target
$44.29
0 analysts
Implied Upside
+26.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$35 - $50
Analyst target range
The target price range spans from a low of $36.00 to a high of $60.00, representing a wide spread of 66.7% from low to high, indicating significant uncertainty about KBR's future performance. The low target of $36.00 is nearly at the current price, suggesting that even the most bearish analyst sees limited downside, possibly pricing in continued revenue declines or margin compression. The high target of $60.00 implies a 63.9% upside, likely assuming successful execution of the Antarctica contract and other large projects, along with margin expansion in the Sustainable Technology Solutions segment. The wide range reflects divergent views on the timing and magnitude of KBR's recovery, with recent upgrades from Citigroup and Truist Securities contrasting with downgrades from UBS and KeyBanc, highlighting the debate over the company's growth trajectory.
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Bulls vs Bears: KBR Investment Factors
KBR presents a classic value-versus-momentum dilemma. The bull case rests on compelling valuation metrics—forward P/E of 8.97x, PEG of 0.84x—and a robust backlog from mega-contracts like the $8 billion Antarctica deal, which could drive a significant earnings recovery. The bear case is equally strong, with revenue contracting 11.17% YoY, a high debt load, and a stock that has badly lagged the market, down 21.67% over the past year. Currently, the bearish evidence on revenue and price action is more immediate, but the valuation and contract wins provide a strong foundation for a potential turnaround. The single most important tension is whether KBR can convert its massive backlog into revenue growth and margin expansion; if it does, the stock could re-rate significantly, but if execution falters, the downside to the 52-week low of $29.94 is real.
Bullish
- Undervalued on forward earnings: KBR trades at a forward P/E of 8.97x versus a trailing P/E of 12.62x, implying the market expects ~40% EPS growth. The PEG ratio of 0.84x suggests the stock is undervalued relative to its growth prospects, a compelling value signal for a company with a 'Buy' consensus.
- Massive contract wins secure backlog: The $8 billion Antarctica contract and the Basra oil deal provide multi-year revenue visibility. These wins, announced in June and February 2026 respectively, underpin future cash flows and support the analyst high target of $60, which implies 63.9% upside from the current price.
- Strong profitability and cash flow: KBR generated $482 million in trailing twelve-month free cash flow and a net margin of 5.33% in the latest quarter. With an ROE of 27.6% and operating margin of 7.3%, the company demonstrates efficient capital deployment and earnings quality.
- Low beta offers defensive appeal: With a beta of 0.451, KBR is significantly less volatile than the broader market. This defensive characteristic, combined with a 1.6% dividend yield, makes it attractive for risk-averse investors seeking stability in an uncertain macro environment.
Bearish
- Revenue declining year-over-year: Q4 2025 revenue fell 11.17% YoY to $1.885 billion, reversing prior growth. This marks a clear deceleration trend, with quarterly revenue dropping from $2.055 billion in Q1 2025 to $1.885 billion in Q4, raising concerns about demand and execution.
- Stock underperformed market badly: KBR is down 21.67% over the past year, while the S&P 500 gained 18.19%. The stock sits at 70.1% of its 52-week range, near the lows, indicating persistent selling pressure and a lack of investor conviction.
- High debt-to-equity ratio: KBR's debt-to-equity ratio stands at 2.08, indicating significant leverage. This amplifies financial risk, especially if revenue continues to decline or interest rates remain elevated, potentially constraining growth investments.
- Wide analyst target range: The analyst target range spans from $36 to $60, a 66.7% spread, reflecting deep uncertainty about KBR's future. The low target is essentially at the current price, suggesting even the most bearish analyst sees limited upside, while downgrades from UBS and KeyBanc highlight skepticism.
KBR Technical Analysis
KBR's price trend over the past year has been decisively bearish, with the stock down 21.67% over the trailing 12 months, significantly underperforming the S&P 500's +18.19% gain. The current price of $36.61 sits at 70.1% of its 52-week range (between $29.94 low and $52.23 high), indicating the stock is closer to its lows than highs, reflecting persistent selling pressure and a lack of investor conviction. This positioning suggests the market is pricing in operational challenges or sector headwinds, though the stock's beta of 0.451 implies lower volatility than the broader market, which may appeal to risk-averse investors seeking defensive characteristics.
Beta
0.45
0.45x market volatility
Max Drawdown
-41.8%
Largest decline past year
52-Week Range
$30-$48
Price range past year
Annual Return
-25.2%
Cumulative gain past year
| Period | KBR Return | S&P 500 |
|---|---|---|
| 1m | -7.6% | -0.7% |
| 3m | +1.3% | +2.5% |
| 6m | -7.7% | +16.5% |
| 1y | -25.2% | +15.2% |
| ytd | -13.3% | +12.1% |
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KBR Fundamental Analysis
KBR's revenue trajectory has turned negative, with the most recent quarter (Q4 2025, ending January 2, 2026) reporting revenue of $1.885 billion, a decline of 11.17% year-over-year. This marks a reversal from the prior year's growth, as seen in Q1 2025 revenue of $2.055 billion and Q2 2025's $1.952 billion, indicating a deceleration trend. The revenue decline is broad-based, with the Sustainable Technology Solutions segment generating $1.115 billion in the latest quarter, though segment-level growth rates are not provided. The negative growth raises concerns about KBR's ability to maintain its top-line momentum, though the company's backlog and recent contract wins (e.g., $8 billion Antarctica deal) may provide future revenue stability.
Quarterly Revenue
$2.0B
2026-07
Revenue YoY Growth
+1.6%
YoY Comparison
Gross Margin
14.8%
Latest Quarter
Free Cash Flow
$347000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is KBR Overvalued?
Given KBR's positive net income of $111 million in the latest quarter, the PE ratio is the appropriate primary valuation metric. The trailing PE stands at 12.62x, while the forward PE is 8.97x, implying the market expects earnings growth of approximately 40% over the next year, a bullish signal. This gap suggests investors are pricing in a significant earnings recovery, likely driven by cost efficiencies and contract ramp-ups. The PEG ratio of 0.84x further supports the view that the stock is undervalued relative to its growth prospects, as a PEG below 1 typically indicates undervaluation.
PE
12.6x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. KBR's debt-to-equity ratio of 2.08 indicates high leverage, which could strain cash flows if interest rates remain elevated or earnings decline. The company's revenue fell 11.17% YoY in Q4 2025, and with a net margin of only 5.33%, there is limited buffer against cost overruns or project delays. Free cash flow of $482 million TTM is positive, but it could be pressured by debt servicing and working capital needs. Additionally, the company's reliance on large contracts, such as the $8 billion Antarctica deal, creates concentration risk; any cancellation or delay would materially impact revenue visibility.
FAQ
The key risks of holding KBR are: 1) Financial risk: high debt-to-equity of 2.08 and thin net margin of 5.33% could strain cash flows if revenue declines continue. 2) Operational risk: revenue fell 11.17% YoY in Q4 2025, and any further decline could hurt profitability. 3) Market risk: the stock has underperformed the S&P 500 by 40 percentage points over the past year, and a broader market downturn could exacerbate losses. 4) Company-specific risk: execution on the $8 billion Antarctica contract is critical; any cost overruns or delays could damage investor confidence. The most severe risk is a combination of these factors leading to a decline to the 52-week low of $29.94, a potential 18.2% loss.
The 12-month forecast for KBR is cautiously optimistic. In the base case (50% probability), the stock could reach the analyst average target of $45.86, implying 25.3% upside. In the bull case (30% probability), it could rise to $60, a 63.9% gain, if the company executes well on its backlog and margins expand. In the bear case (20% probability), it could fall to $30, an 18.2% loss, if revenue declines persist and execution fails. The most likely scenario is the base case, driven by the assumption that the company's backlog will stabilize revenue and drive modest earnings growth. Investors should monitor quarterly results for signs of improvement.
KBR appears undervalued based on several metrics. The forward P/E of 8.97x is well below the trailing P/E of 12.62x, implying the market expects significant earnings growth. The PEG ratio of 0.84x is below 1, indicating undervaluation relative to growth. The EV/EBITDA of 8.34x is also reasonable. Compared to its own history, the stock is trading near the lower end of its valuation range, and the PS ratio of 0.67x is low. The market seems to be pricing in a pessimistic scenario, but if the company delivers on its backlog, the stock could re-rate higher. Overall, the valuation suggests the market is expecting a recovery, and the current price offers a margin of safety.
KBR is a good buy for investors with a contrarian, value-oriented approach. The stock trades at a forward P/E of 8.97x, which is attractive relative to its growth prospects, and the analyst consensus is 'Buy' with an average target price of $45.86, implying 25.3% upside. However, the recent revenue decline of 11.17% YoY and high debt-to-equity ratio of 2.08 present significant risks. For investors willing to accept near-term volatility and bet on the company's execution of its $8 billion Antarctica contract, the risk/reward is favorable. For those seeking immediate momentum or stability, it may be better to wait for evidence of a turnaround.
KBR is more suitable for long-term investment, given its low beta of 0.451 and the multi-year nature of its contracts. The stock is currently in a downtrend, so short-term traders may find limited opportunities, though the recent 5.6% gain over the past month suggests some stabilization. For long-term investors, the forward P/E of 8.97x and PEG of 0.84x indicate that the stock is undervalued, and the $8 billion Antarctica contract provides revenue visibility through 2030. A minimum holding period of 2-3 years is recommended to allow the backlog to convert into earnings and for the market to recognize the value. The dividend yield of 1.6% provides a modest income while waiting for capital appreciation.
