Jacobs Solutions Hits Some Bumps Despite Q2 Beat, Narrows Outlook
Portfolio Pulse from Lekha Gupta
Jacobs Solutions Inc. (NYSE:J) reported Q2 FY24 results with revenue of $4.27 billion and adjusted EPS of $1.91, both surpassing consensus estimates. Despite the beat, shares fell after the company narrowed its FY24 outlook for adjusted EBITDA and EPS. Jacobs also announced a deal to separate and combine its CMS and parts of the Divergent Solutions businesses with Amentum, expected to close in 2H FY24. The stock is part of Tidal ETF Trust Newday Ocean Health ETF (NYSE:AHOY) and Valued Advisers Trust Kovitz Core Equity ETF (NYSE:EQTY).
May 07, 2024 | 2:46 pm
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NEUTRAL IMPACT
AHOY ETF, which includes Jacobs Solutions in its holdings, may see indirect impact from Jacobs' earnings report and business restructuring news.
As an ETF holding Jacobs Solutions, AHOY may experience indirect price movements based on Jacobs' performance and strategic decisions. However, the diversified nature of ETFs means the impact is likely to be muted compared to direct stock holders.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
EQTY ETF, holding Jacobs Solutions, might see an indirect impact from Jacobs' Q2 performance and its strategic restructuring announcement.
Given that EQTY includes Jacobs Solutions, the ETF could see some indirect effects from Jacobs' financial results and the announcement of its business separation with Amentum. The impact is expected to be limited due to the ETF's diversified portfolio.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Jacobs Solutions reported strong Q2 FY24 results but saw its stock price fall after narrowing its FY24 financial outlook.
The negative stock price reaction likely stems from the narrowed FY24 outlook, which could have disappointed investors hoping for stronger guidance. Additionally, the announcement of the business separation with Amentum, despite being a strategic move, may add uncertainty in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100