UBS cuts KBR rating on government contract concerns

UBS downgrades rating of government contractor KBR KBR.N to "neutral" from "buy"

Lowers price target to $54 from $66, still representing 12% upside to stock's last close

Brokerage expects KBR to reduce guidance to reflect cancellation of Department of Defense U.S. Transportation Command's global household goods contract awarded to a KBR-led joint venture

Says near-term direction of KBR's government-facing Mission Technology Solutions segment uncertain due to shifting government priorities, increased scrutiny of programs and contracts

Also notes tough comps and project-timing uncertainties for KBR's energy-related Sustainable Technology Solutions segment could lead to flat-to-down earnings YOY in H1'26

Two brokerages rate KBR "strong buy", four "buy" and two "hold"; their median PT is $67 - LSEG-compiled data

As of last close, stock had fallen ~17% YTD vs a 12.3% increase in the S&P 500 Industrials sector index .SPLRCI