Jacobs Corp: A Strategic Play in Boeing's Defense Infrastructure Boom

The U.S. defense sector is undergoing a renaissance, fueled by modernization priorities, geopolitical tensions, and sustained federal spending. At the heart of this boom is Jacobs Corporation (J), which has secured a pivotal role in Boeing's $multi-billion St. Louis campus expansion—a project that epitomizes the convergence of advanced manufacturing, national security, and infrastructure investment. For investors seeking exposure to both defense contractors and critical U.S. infrastructure development, Jacobs' execution of this project offers a compelling narrative of long-term revenue growth and strategic positioning.

The St. Louis Expansion: A Blueprint for Defense Modernization

Boeing's St. Louis campus is undergoing a transformation to nearly double its regional manufacturing capacity, with a 1.1-million-square-foot facility dedicated to advanced aircraft assembly and classified operations. The project, set for phased completion between 2026 and 2030, represents Boeing's largest defense investment in the region, aligning with U.S. priorities to bolster domestic production of next-generation military aircraft.

Jacobs is leading the design, engineering, and environmental compliance for this initiative. A key highlight is its accelerated National Environmental Policy Act (NEPA) approval—secured in just eight months—demonstrating its ability to navigate regulatory hurdles critical to defense projects. This speed is vital for a sector where delays can derail timelines tied to national security timelines.

Jacobs' Defense Expertise: A Track Record of Execution

Jacobs' involvement in the St. Louis project is no accident. The firm has deep roots in defense infrastructure, with a portfolio spanning contracts for the U.S. Navy, Air Force, and Space Force. Notable projects include:
- Fermilab's DUNE Near Site: A complex scientific facility requiring precision engineering.
- Coastal Resilience at Tyndall Air Force Base: Climate adaptation for critical military infrastructure.
- Los Angeles Federal Courthouse: A showcase of Jacobs' ability to manage high-stakes public-sector projects.

These successes underscore Jacobs' unique capability to deliver multi-phase, long-duration projects—a skillset perfectly aligned with Boeing's 5-year timeline. The St. Louis contract also builds on Jacobs' recent wins, such as the $4 billion U.S. Space Force contract and Australia's Marinus Link interconnector, signaling a broader trend of securing high-margin defense and infrastructure deals.

Defense Sector Tailwinds: Federal Spending and National Security

The St. Louis project is a microcosm of two megatrends driving Jacobs' growth:
1. Federal Infrastructure Investment: The Bipartisan Infrastructure Law (2021) allocated $550 billion to modernize U.S. infrastructure, with defense facilities a priority.
2. Defense Modernization: The Pentagon's $858 billion FY2024 budget prioritizes advanced manufacturing, digital systems, and resilient supply chains—all core competencies for Jacobs.

The classified facilities within the Boeing project further highlight its alignment with U.S. strategic priorities, such as countering adversaries through technological superiority. As defense spending remains elevated, Jacobs' role as a “prime contractor” for complex projects positions it to secure steady, multiyear revenue streams.

Sustainable Infrastructure: A Key Synergy

Beyond defense, Jacobs is integrating environmental solutions into its projects. The St. Louis expansion includes demolition of outdated facilities and adherence to sustainability standards—a reflection of its broader strategy. The firm's focus on green infrastructure aligns with federal mandates, such as the Inflation Reduction Act's $369 billion in climate and energy investments. This dual expertise in defense and sustainability creates a divergent advantage, making Jacobs a rare play in both sectors.

Financials and Investment Thesis

Jacobs' financial profile reinforces its appeal:
- Revenue: ~$12 billion in 2023, with defense and critical infrastructure segments growing at high single-digit rates.
- Profitability: Gross margins of ~20%, supported by fixed-price contracts and scale efficiencies.
- Balance Sheet: Net debt/EBITDA of ~1.5x, leaving flexibility for acquisitions or share buybacks.

While J has underperformed Boeing (BA) and the ITA ETF in recent quarters—likely due to macroeconomic volatility—the St. Louis project's phased execution (2026–2030) provides visibility into future earnings. With ~$3 billion in contract backlogs tied to defense and federal projects, Jacobs is well-positioned to outperform if fiscal 2024 earnings stabilize.

Risk Considerations

Risks include geopolitical shifts (e.g., reduced defense spending) and project delays. However, Jacobs' ~$20 billion in federal contracts (as of 2023) and its role in classified facilities suggest a low sensitivity to near-term fiscal cuts. Meanwhile, its rapid NEPA approval process reduces regulatory risk.

Conclusion: Buy for Long-Term Defense Infrastructure Exposure

Jacobs' role in Boeing's St. Louis expansion is more than a project—it's a catalyst for its growth in the $1.8 trillion global defense market. With federal spending, modernization mandates, and sustainability integration driving demand, J is a prime candidate for investors seeking exposure to critical U.S. infrastructure and defense.

Investment Rating: Buy
Price Target: $75–80 (vs. current $62) based on 15–18x forward P/E (vs. 5-year average of ~16x).

The St. Louis project is just one piece of Jacobs' expanding footprint. As defense infrastructure spending remains a bipartisan priority, this is a stock to own for the next decade.