Citi has adjusted its price target for Fluor Corporation (FLR, Financial), reducing it from $55 to $46, while maintaining a Buy rating on the shares. This adjustment comes as the firm anticipates that first-quarter results in the engineering and construction sector will generally align with or surpass market expectations. However, concerns about economic slowdown could impact management's forward-looking statements, potentially signaling challenges in project activity.
The company faces pressures from elevated input costs, driven by tariffs and economic uncertainties. These factors could prompt clients to reconsider their project and capital expenditure plans, contributing to an overall sense of caution in the industry.
Despite these challenges, Citi identifies Quanta Services (PWR) as their preferred choice in the sector, suggesting a robust outlook. MasTec (MTZ) and KBR, Inc. (KBR) are also highlighted as other promising picks in the field.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Fluor Corp (FLR, Financial) is $46.61 with a high estimate of $60.00 and a low estimate of $36.50. The average target implies an upside of 30.93% from the current price of $35.60. More detailed estimate data can be found on the Fluor Corp (FLR) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, Fluor Corp's (FLR, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Fluor Corp (FLR, Financial) in one year is $39.50, suggesting a upside of 10.96% from the current price of $35.6. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Fluor Corp (FLR) Summary page.
FLR Key Business Developments
Release Date: February 18, 2025
- Revenue: $16.3 billion for the year, a 5.4% increase from 2023.
- Net Income: $2.1 billion or $12.30 per diluted share.
- New Awards: Totaled $15.1 billion for 2024.
- Book to Burn Ratio: Just under 1 for new awards; net gross margin book to burn ratio at 107%.
- Segment Profit: $635 million for the year.
- Adjusted EBITDA: $530 million for 2024.
- Cash and Cash Equivalents: $3 billion, a 14% increase from 2023.
- Operating Cash Flow: $828 million for the year.
- Urban Solutions Profit: $81 million for the quarter.
- Energy Solutions Profit: $63 million for the fourth quarter.
- Mission Solutions Profit: $45 million in the fourth quarter.
- Ending Backlog: $17.7 billion for Urban Solutions; $7.6 billion for Energy Solutions; $2.7 billion for Mission Solutions.
- Share Repurchase: $125 million or 2.3 million shares purchased in the fourth quarter.
- 2025 Guidance: EBITDA of $575 to $675 million; Operating cash flow of $450 to $500 million; EPS of $2.25 to $2.75 per diluted share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fluor Corp (FLR, Financial) achieved a 5.4% increase in revenue for 2024, reaching $16.3 billion.
- The company recorded new awards totaling $15.1 billion, with a healthy net gross margin book to burn ratio of 107%.
- Fluor Corp (FLR) has a strong cash flow and robust capital structure, supporting a backlog that is approximately 80% reimbursable.
- The company is well-positioned in the data center market, having signed a master agreement with a leading technology provider.
- Fluor Corp (FLR) reported significant progress on major projects, including the LNG Canada project, which is over 95% complete.
Negative Points
- Urban Solutions segment profit decreased to $81 million from $147 million a year ago.
- Energy Solutions' pending backlog decreased to $7.6 billion from $9.7 billion a year ago.
- The company recognized a $116 million provision related to a jury verdict against a Fluor joint venture on an infrastructure project.
- Fluor Corp (FLR) anticipates up to $200 million in funding required for late-stage legacy projects in 2025.
- The timeline for monetization of NuScale has been slower than desired, requiring patience in the nuclear space.
