Johnson Rice Believes There's Upside To Be Had In KBR Shares Following Recent Pullback

A recent pullback in KBR, Inc (NYSE: KBR) shares represents an attractive buying opportunity, according to Johnson & Rice.

Analysts cited two projects that are close to completion as a catalyst for the stock price, including the acquisitions of Wyle and Honeywell Technology Solutions. Both deals have increased KBR's FY 2016 revenue derived from the attractive lower risk government services segment, from 20 percent to 41 percent.

"We believe KBR's trading multiple should trend higher given the company shift in business mix to more low-risk, cost reimbursable revenues," said analysts at Johnson & Rice.

A judgement of $465 million in favor of KBR handed in August, related to an offshore production platform project from 2004, should be realized in the second half of 2017.

Johnson & Rice raised KBR's price target to $18, with an Accumulate rating.