Fluor stock PT upped, Outperform reaffirmed on mega-trend exposure and strong execution
On Monday, Fluor Corporation (NYSE: NYSE:) saw its price target increased to $54.00 from the previous $46.00 by Baird, while the firm maintained its Outperform rating on the stock. The adjustment follows the company’s demonstrated strong execution and its involvement in key growth areas such as GLP-1 manufacturing, semiconductor plants, and data centers.
The analyst from Baird highlighted Fluor’s ability to manage its legacy loss jobs effectively, noting that these now appear very manageable. Furthermore, the future work portfolio is mostly reimbursable, with the backlog margin showing a consistent upward trend. The valuation of Fluor’s shares was also described as reasonable, particularly given the company’s engagement in the faster-growing segments of the construction sector.
According to Baird, while there are positive indicators for Fluor, including the potential for capital returns, there are also factors that investors should be cautious about. These include the uncertainty around near-term earnings performance and the observation that the stock’s valuation is significantly higher than its previous lows.
The analyst’s commentary suggests that despite some uncertainties, Fluor’s positioning in the market, combined with its strategic focus on sectors with strong growth potential, could lead to favorable outcomes for the company and its shareholders. The firm’s improved financial management and the higher margin backlog are also seen as positive developments that may contribute to the company’s success in the future.
In other recent news, Fluor Corporation has reported strong financial results, along with significant leadership changes. The company announced robust Q2 2024 revenues of $4.2 billion, coupled with consolidated new awards totaling $3.1 billion. This strong performance has resulted in an impressive backlog of $32.3 billion, primarily composed of reimbursable contracts. Additionally, Fluor reported adjusted earnings per share of $0.85 and adjusted EBITDA of $165 million.
Simultaneously, the company has appointed Jim Breuer as the new Chief Operating Officer (COO) and Kevin Hammonds as the new Chief Legal Officer (CLO). These appointments are part of a strategic move to enhance project delivery and operational efficiency across its business segments. The company maintains its 2024 adjusted EPS guidance of $2.50 to $3 and adjusted EBITDA guidance of $625 million to $675 million.
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