Andrew Kaplowitz, an analyst from Citi, maintained the Hold rating on Fluor (FLR – Research Report). The associated price target remains the same with $47.00.
Andrew Kaplowitz has given his Hold rating due to a combination of factors affecting Fluor Corporation’s performance and outlook. Despite a miss in first-quarter sales and adjusted earnings per share, Fluor reported strong new awards and an increased backlog, which could provide a clear earnings trajectory through the year 2024. However, Kaplowitz remains cautious due to ongoing challenges with execution, including a notable charge from a joint venture in Mexico, and the overhang of legacy projects, which could potentially affect future performance and result in a conservative stance on the stock.
Furthermore, although there was a cash outflow in the first quarter, Fluor raised its cash flow guidance for 2024, signaling a potential for healthy free cash flow generation. This improvement might allow for increased capital deployment opportunities such as share buybacks or dividends. Despite these positive indicators, the persistent uncertainties and uneven execution contribute to Kaplowitz’s decision to maintain a Neutral position, with a target price of $47 based on a steady earnings multiple, reflecting a cautious yet acknowledging view of the company’s financial prospects.
In another report released on April 22, Barclays also maintained a Hold rating on the stock with a $39.00 price target.
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Fluor (FLR) Company Description:
Fluor Corp. is a holding company, which engages in providing engineering, procurement, construction, fabrication and modularization, operations, maintenance and asset integrity, as well as project management services, on a global basis. It operates through the following four segments: Energy & Chemicals, Mining, Industrial, Infrastructure & Power, Diversified Services and Government. The Energy & Chemicals segment focuses on opportunities in the upstream, midstream, downstream, chemical, petrochemical, offshore and onshore oil and gas production, liquefied natural gas and pipeline markets. The Mining, Industrial, Infrastructure & Power segment provides design, engineering, procurement, construction and project management services to the mining and metals, transportation, life sciences, advanced manufacturing and power sectors. The Diversified segment provides a wide array of asset services, asset integrity services, equipment solutions and staffing services. The Government segment provides engineering, construction, logistics, base and facilities operations and maintenance, contingency response and environmental and nuclear services to the U.S. government and governments abroad. The company was founded by John Simon Flour, Sr. in 1912 and is headquartered in Irving, TX.
