Future remains very brightOnce Bidens $2T bill passes, CVX should benefit from some of this work. They have connections with large construction and enginerring firms and their product fits in nicely. In the interim, they have a strong backlog of work and are surely bidding on more.
Copied from an article in TD webroker this morning focused on engineering firms:
Though Canaccord Genuity analyst Yuri Lynk thinks the “lingering” impacts of the COVID-19 pandemic are likely to weigh on first-quarter 2021 results for Canadian engineering firms, he sees the macro backdrop improving, “setting the stage for growth in 2022.”
“President Biden’s proposed US$2 trillion, eight-year infrastructure bill could dramatically boost the growth outlook,” said Mr. Lynk in a research note released Monday. “Clearly, there is risk around what the final U.S. infrastructure bill will look like if and when it gets passed. What we can say at this point is that it has the potential to meaningfully boost end-market demand in the U.S. for the engineering companies. Assuming the bill passes as is and the money is spread equally across eight years starting in 2022 it would boost annual spending on transportation by 49 per cent, water/sewer by 32 per cent, education by 16 per cent, road/highway by 17 per cent and power by 14 per cent. In reality, spending likely begins building in 2022 as large projects take a year or more to obtain their social and environment licenses and permits. This would imply an 8 to 10-year upcycle in demand for engineering services.”