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• In recent weeks, ENKA announced it selected KBR to provide detailed engineering design for Iraq’s Associated Gas Upstream Project Phase 2, while KBR itself reported contract wins for the Bul Hanine oil and gas field in Qatar and opened a new office near Washington, D.C. to boost government client engagement.

• Alongside these developments, KBR reported third quarter results showing higher net income and earnings per share, but lowered its full-year revenue guidance for 2025 despite completing a major share buyback tranche.

• We’ll examine how new international engineering contract awards, particularly the collaboration with ENKA and TotalEnergies, influence KBR’s investment narrative.

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The core thesis for owning KBR centers on its ability to translate engineering expertise and global relationships, especially in defense, energy transition, and government contracting, into sustained backlog growth and margin expansion. While the recent wins in Iraq and Qatar showcase international momentum, these awards have a limited immediate effect on the main short-term catalyst: normalization of delayed U.S. government award activity. The biggest near-term risk remains ongoing revenue unpredictability tied to U.S. government budgeting and program decisions, which the latest news does not directly resolve.

Among KBR’s recent actions, the opening of a new office in Rosslyn, Virginia, is most relevant. This move enhances access to U.S. government stakeholders and lays the groundwork for improved contract engagement, a critical element given the current risk around government funding delays. As near-term revenue visibility still depends on smoother federal contract flows, this step could help shape the pace of backlog conversion if award activity picks up.

Yet, despite KBR’s global wins, investors should be mindful that…

Read the full narrative on KBR (it’s free!)

KBR is projected to reach $9.4 billion in revenue and $664.3 million in earnings by 2028. This outlook is based on a forecasted 5.4% annual revenue growth rate and a $264.3 million earnings increase from the current $400.0 million.

Uncover how KBR’s forecasts yield a $59.57 fair value, a 40% upside to its current price.

Fair value estimates from eight members of the Simply Wall St Community span from US$40 to over US$5,400, reflecting a broad spectrum of expectations. Many see upside opportunity, but with unpredictable U.S. government contracting still a key risk, the company’s outlook will remain a point of active debate, compare these perspectives to sharpen your own view.

Explore 8 other fair value estimates on KBR – why the stock might be worth 6% less than the current price!

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

• 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.

• Our free KBR research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate KBR’s overall financial health at a glance.

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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.

Companies discussed in this article include KBR.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Morningstar (MORN) shares have taken investors on a ride over the past year, with returns down nearly 38% in that span. Market watchers are looking closely at recent performance to gauge where value opportunities might emerge.

See our latest analysis for Morningstar.

After a tough year for Morningstar, the share price is showing some early signs of stabilizing, climbing 1.82% over the last trading day after months of negative momentum. While the company’s long-term total shareholder returns have held up better than recent dips might suggest, there is no denying that short-term sentiment remains cautious as investors look for signals of a turnaround.

If you’re on the lookout for other stocks that may be gaining ground under the radar, now is a great time to broaden your search and discover fast growing stocks with high insider ownership

With shares trading well below long-term analyst price targets and recent results showing some signs of progress, the key question is whether Morningstar is undervalued at current levels or if the market is anticipating growth ahead.

Morningstar’s price-to-earnings ratio of 23.6x puts it just below the Capital Markets industry average, suggesting the market sees value but is not pricing in outsized upside. At the last close price of $215.49, this signals Morningstar trades at a slightly lower valuation than its peers, though not at a dramatic discount.

The price-to-earnings (P/E) ratio reflects how much investors are willing to pay today for a dollar of earnings tomorrow. For financial services firms like Morningstar, the P/E ratio is often used as a barometer of growth expectations and profitability.

In this case, the P/E multiple is lower than the average for similar companies in the sector, meaning investors are not overpaying relative to the industry. However, compared to the estimated “fair” P/E of 14.1x, the current valuation could be seen as stretched if the company does not deliver higher earnings growth to justify the market’s premium. The current level is above what might be expected if the market consensus shifts closer to intrinsic value.

Explore the SWS fair ratio for Morningstar

Result: Price-to-Earnings of 23.6x (ABOUT RIGHT)

However, continued earnings volatility or slower revenue growth could pressure the stock, particularly if broader market sentiment remains defensive in the near term.

Find out about the key risks to this Morningstar narrative.

Taking another approach, our SWS DCF model presents a very different picture for Morningstar. Based on future cash flows, the model finds the current price of $215.49 is well above its fair value estimate of $93.05. This suggests Morningstar could be significantly overvalued at the moment. How do investors reconcile these sharply opposing signals as they look ahead?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Morningstar for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 875 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you have a different perspective or prefer to dive into the numbers yourself, you can easily assemble your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Morningstar.

Keep your portfolio ahead of the curve by uncovering top stocks in booming sectors and fast-changing markets. Now is your chance to stay a step ahead.

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.

Companies discussed in this article include MORN.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com