Thanks to its privileged competitive position in sectors including infrastructure, water treatment, life sciences, aerospace and semiconductors, Jacobs is forecasting annual revenue growth of between 6% and 8% by 2029.
It is also projecting further margin expansion by that date. On that front, its track record speaks for itself: over the decade 2016-2025, while revenue has barely increased, operating profit has almost tripled.
Under the leadership of its former chief executive Steve Demetriou, Jacobs embarked on a series of major acquisitions, notably between 2018 and 2022. Remarkably, these transactions were largely self-financed through asset disposals; they neither weakened the balance sheet nor led to an increase in the number of shares outstanding.
This therefore amounts to a genuine change in scope - punctuated, of course, by the sale of the oil and chemicals businesses - rather than a more conventional external growth strategy, but with a compelling impact on the group's income statement.
The continuation of this logic was the separation, two years ago, of the business tied to the US federal government, now listed under the name Amentum Holdings, and structurally two to three times less profitable than the private-sector business. Amentum is chaired by Steve Demetriou, who was replaced at the helm of Jacobs by the low-profile Bob Pragada.
Investors have welcomed the pivot. Jacobs, which once commanded an average valuation of 8x EBITDA, is now being awarded a multiple almost twice as high.
Unlike what is being seen in the European market, where the sector in general is going through a very severe crisis, US investors continue to endorse the model of their large consulting firms.
Still very well capitalised, Jacobs returned $935m to shareholders last year, largely through the biggest share buyback in its history.
