KBR Stock Falls Despite Huge Military Contract

Short interest has been rising on KBR

by Josh Selway

Published on Mar 25, 2019 at 10:29 AM

The shares of KBR, Inc. (NYSE:KBR) are trading down 0.6% at $18.16, despite news the company won a nearly $96 million contract to supply cybersecurity and engineering services to the U.S. military. This just extends the selling seen on Friday that pushed the equity down 4.6% and below the 200-day moving average, which had briefly stepped up as support. Overall, the security has a year-over-year lead of 13.7%, but is still looking up at its November high of $22.21.

Meanwhile, options data suggests some traders were expecting a breakout from KBR stock. During the past 10 days there was a notable increase in open interest at the May 20 call, and buy-to-open activity was detected there, meaning these traders are betting on the security rising above $20 in the coming weeks. It's worth pointing out how this round number level acted as a ceiling earlier this month.

The sentiment setup among analysts is mixed, almost evenly split between "strong buy" or "buy" ratings and "holds." However, the average 12-month price target stands up at $22.91, suggesting brokerage firms see upside ahead for the shares.

On the other hand, short interest has been ticking higher, increasing 7.9% in the last two reporting periods. Overall, the 4.8% of KBR's float sold short would take 3.5 days for short sellers to buy back, based on average daily trading volumes.


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