KBR (KBR): Valuation Check After Lake Charles LNG Suspension and Lower Truist Outlook

KBR (KBR) just slid about 5% after the Lake Charles LNG export project was suspended, a move that has sharpened investor focus on how much of the company’s future depends on big engineering work.

See our latest analysis for KBR.

The Lake Charles setback comes after a mixed stretch for the stock, with a 1 year to date share price return of around minus 30 percent and a 1 year total shareholder return of roughly minus 29 percent. At the same time, new defense and energy transition wins hint that sentiment could recover if investors regain confidence in the long term pipeline.

If this kind of project risk has you reassessing your exposure, it may be worth exploring other aerospace and defense names using our screen of aerospace and defense stocks as potential alternatives.

With shares down sharply this year but still trading at a sizeable discount to analyst targets, the key question now is whether KBR is a mispriced long term compounder or if the market is correctly anticipating slower growth.

Most Popular Narrative Narrative: 27.7% Undervalued

Against a last close of $40.23, the most popular narrative implies a fair value near $55.63, pointing to meaningful upside if its assumptions hold.

The passage of the U.S. Reconciliation Act is unlocking over $1 trillion in national security and defense spending through 2026, with KBR well-positioned to capture incremental funding due to its established positions in mission tech, advanced defense technologies, and intelligence contracts, supporting potential revenue and earnings growth.

Read the complete narrative.

Curious how disciplined revenue growth, fatter margins, and a lower future earnings multiple can still justify a higher value than today’s price? The full narrative connects those dots.

Result: Fair Value of $55.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution missteps on large fixed price contracts or prolonged delays in government awards could quickly erode confidence in this undervalued thesis.

Find out about the key risks to this KBR narrative.

Build Your Own KBR Narrative

If you see the story differently or prefer to dig into the numbers yourself, you can build a customised view in just a few minutes: Do it your way.

A great starting point for your KBR research is our analysis highlighting 6 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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