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3 Factors That Underscore Fluor's (FLR) Bullish Prospects
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Fluor Corporation’s (FLR - Free Report) strategic efforts to drive shareholders’ value, the U.S. administration’s infrastructural push and diversity in business have been strengthening its prospects.
Shares of this engineering, procurement, construction and maintenance service provider have climbed 17.7% year to date, outperforming the Zacks Engineering - R and D Services industry’s 3.8% rise. Earnings estimates for 2022 for this Zacks Rank #2 (Buy) company have moved 19.6% upward over the past 60 days. This positive trend signifies bullish analysts’ sentiments, indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fluor also has a favorable VGM Score of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities to investors.
Image Source: Zacks Investment Research
Let’s delve into the major driving factors.
Strategic Efforts
Fluor has been successfully executing the “Building a Better Future” strategy that underscores four strategic priorities for driving shareholders’ value. First, the company’s emphasis on expanding its portfolio beyond the traditional oil and gas sector — including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and mission solutions — bodes well. Second, Fluor’s decision to not bid competitive fixed-priced EPC in the Energy & Chemicals segment has been bearing fruit. It is more selective in Infrastructure. This marks a significant shift from the prior management team's high-risk, high-margin strategy. Third, Fluor’s solid balance sheet — thanks to the generation of predictable cash flow and earnings — is encouraging. Lastly, the company remains focused on the high-performance culture by advancing diversity, equity and inclusion efforts as well as promoting social progress and sustainability.
Biden’s Infrastructural Move
Fluor and other engineering service providers are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security, and a potential super-cycle in global supply chain investments. A significant boost in infrastructural and public construction spending to underscore the need for rebuilding the nation’s deteriorating roads and bridges and funding new climate resilience and broadband initiatives is a boon for Fluor.
Solid Prospects for 2022
The company exited 2021 with a healthy backlog level of $18.9 billion. Management expects bookings to pick up in the first half of 2022 and highlighted a substantial pipeline for 2022.
For 2022, Fluor expects adjusted EPS of $1.15-$1.40 per share from continuing operations. In 2022, it assumed increased opportunities for new awards across all segments and continued advancing the cost optimization program. It projects a 10% increase in revenues, $50 million adjusted G&A expense per quarter, and a tax rate of 28%. The company anticipates average full-year margins of 5% in Energy Solutions, 3.5-4.5% in Urban Solutions and 3.5% in Mission Solutions.
Impressively, it expects to generate $2.50-$2.90 earnings per share by 2024.
The company has solid prospects, as is evident from the Zacks Consensus Estimate for 2022 earnings of $1.34 per share, which indicates 42.6% year-over-year growth. The same for 2023 is expected to witness a 33.6% growth rate.
Other Top-Ranked Stocks From the Broader Construction Sector
AECOM (ACM - Free Report) — a Zacks Rank #2 company — is a leading solutions provider delivering professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.
Over the past 60 days, AECOM’s earnings estimates for fiscal 2022 have increased to $3.40 from $3.30. The projected figure indicates a 20.6% year-over-year rise.
D.R. Horton, Inc. (DHI - Free Report) — a Zacks Rank #2 company — is a Texas-based prime homebuilder. The company continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.
The consensus mark for DHI’s earnings for fiscal 2022 has increased to $15.88 from $15.80 per share over the past 30 days. The projected figure indicates a 39.2% year-over-year rise.
Lennar Corporation (LEN - Free Report) — a Zacks Rank #2 company — is a well-known homebuilder. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, leading to higher operating leverage.
The consensus mark for LEN’s earnings for fiscal 2022 has increased to $16.43 from $15.82 per share over the past 30 days. Lennar’s earnings for fiscal 2022 are expected to rise 15.1% year over year.
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3 Factors That Underscore Fluor's (FLR) Bullish Prospects
Fluor Corporation’s (FLR - Free Report) strategic efforts to drive shareholders’ value, the U.S. administration’s infrastructural push and diversity in business have been strengthening its prospects.
Shares of this engineering, procurement, construction and maintenance service provider have climbed 17.7% year to date, outperforming the Zacks Engineering - R and D Services industry’s 3.8% rise. Earnings estimates for 2022 for this Zacks Rank #2 (Buy) company have moved 19.6% upward over the past 60 days. This positive trend signifies bullish analysts’ sentiments, indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fluor also has a favorable VGM Score of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities to investors.
Image Source: Zacks Investment Research
Let’s delve into the major driving factors.
Strategic Efforts
Fluor has been successfully executing the “Building a Better Future” strategy that underscores four strategic priorities for driving shareholders’ value. First, the company’s emphasis on expanding its portfolio beyond the traditional oil and gas sector — including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and mission solutions — bodes well. Second, Fluor’s decision to not bid competitive fixed-priced EPC in the Energy & Chemicals segment has been bearing fruit. It is more selective in Infrastructure. This marks a significant shift from the prior management team's high-risk, high-margin strategy. Third, Fluor’s solid balance sheet — thanks to the generation of predictable cash flow and earnings — is encouraging. Lastly, the company remains focused on the high-performance culture by advancing diversity, equity and inclusion efforts as well as promoting social progress and sustainability.
Biden’s Infrastructural Move
Fluor and other engineering service providers are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security, and a potential super-cycle in global supply chain investments. A significant boost in infrastructural and public construction spending to underscore the need for rebuilding the nation’s deteriorating roads and bridges and funding new climate resilience and broadband initiatives is a boon for Fluor.
Solid Prospects for 2022
The company exited 2021 with a healthy backlog level of $18.9 billion. Management expects bookings to pick up in the first half of 2022 and highlighted a substantial pipeline for 2022.
For 2022, Fluor expects adjusted EPS of $1.15-$1.40 per share from continuing operations. In 2022, it assumed increased opportunities for new awards across all segments and continued advancing the cost optimization program. It projects a 10% increase in revenues, $50 million adjusted G&A expense per quarter, and a tax rate of 28%. The company anticipates average full-year margins of 5% in Energy Solutions, 3.5-4.5% in Urban Solutions and 3.5% in Mission Solutions.
Impressively, it expects to generate $2.50-$2.90 earnings per share by 2024.
The company has solid prospects, as is evident from the Zacks Consensus Estimate for 2022 earnings of $1.34 per share, which indicates 42.6% year-over-year growth. The same for 2023 is expected to witness a 33.6% growth rate.
Other Top-Ranked Stocks From the Broader Construction Sector
AECOM (ACM - Free Report) — a Zacks Rank #2 company — is a leading solutions provider delivering professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.
Over the past 60 days, AECOM’s earnings estimates for fiscal 2022 have increased to $3.40 from $3.30. The projected figure indicates a 20.6% year-over-year rise.
D.R. Horton, Inc. (DHI - Free Report) — a Zacks Rank #2 company — is a Texas-based prime homebuilder. The company continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.
The consensus mark for DHI’s earnings for fiscal 2022 has increased to $15.88 from $15.80 per share over the past 30 days. The projected figure indicates a 39.2% year-over-year rise.
Lennar Corporation (LEN - Free Report) — a Zacks Rank #2 company — is a well-known homebuilder. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, leading to higher operating leverage.
The consensus mark for LEN’s earnings for fiscal 2022 has increased to $16.43 from $15.82 per share over the past 30 days. Lennar’s earnings for fiscal 2022 are expected to rise 15.1% year over year.