We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why You Shouldn't Bet Against Fluor (FLR) Stock Right Now
Read MoreHide Full Article
Fluor Corporation (FLR - Free Report) has managed to impress investors with its recent earnings streak, as the company’s earnings have surpassed estimates thrice in the four trailing quarters. We believe the company’s leading position in nuclear remediation at government facilities, along with its market diversity and strong focus on streamlining business structure bodes well for future growth.
Driven by impressive growth drivers, the company’s stock has had an impressive run on the bourse in the past three months. It has appreciated 24.1%, significantly outperforming the industry’s average growth of 9%. We believe that the company’s notable traction across markets and good business portfolio will drive growth.
Read on to find out the key catalysts for the company right now.
Factors at Play
Fluor’s market diversity remains a key strength that helps it mitigate the cyclicality of markets in which it operates. The company’s strategy of maintaining a good business portfolio mix permits it to focus on the more stable business markets and capitalize on developing the cyclical markets at suitable times. The long-term prospects of the company also remain strong with existing growth opportunities in renewable energy, gas-fired combined cycle generation and air emissions compliance projects for existing coal-fired power plants.
The company being an industry leader in nuclear remediation at government facilities throughout the United States is anticipated to benefit from the rising demand for energy across the globe. Further, the company remains optimistic about its end markets, including mining. This is due to leading indicators for future capital spending like industrial production and capacity utilization are improving in several regions and industries, which signal higher capital spending.
Moreover, the company maintains a strong focus on enhancing competitive position in the market through prudent leadership initiatives and strategic alliances. For instance, the company’s restructuring initiative under construction and fabrication operations is expected to improve control and delivery of projects, consequently enhancing client satisfaction.This apart the acquisition of Stork Holding B.V. last year has significantly boosted the top line over the past few quarters.Such strategic acquisitions and collaborations are expected to be accretive to Fluor’s financials and contribute to long-term growth.
Despite these positives, the company is facing a dearth of engineering and new projects in recent times, which has hurt growth prospects significantly. Presently, the company’s margins are under pressure as it is transitioning from higher margin engineering to lower margin construction activities, particularly related to Energy & Chemicals & Mining segment.
This apart, volatility in commodity prices, and the cyclical nature of the company’s commodity-based business lines, poses significant challenges in the forthcoming quarters. Going forward, it believes that clients of Energy, Chemicals and Mining segment will maintain a cautious approach while taking investment decisions which will add to woes.
Considering growth drivers and the risks that the company faces, we have a Zacks Rank #3 (Hold) on Fluor.
Thor Industries has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 15.3%.
NVR has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 17.2%.
Rayonier has outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 96%.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
Why You Shouldn't Bet Against Fluor (FLR) Stock Right Now
Fluor Corporation (FLR - Free Report) has managed to impress investors with its recent earnings streak, as the company’s earnings have surpassed estimates thrice in the four trailing quarters. We believe the company’s leading position in nuclear remediation at government facilities, along with its market diversity and strong focus on streamlining business structure bodes well for future growth.
Driven by impressive growth drivers, the company’s stock has had an impressive run on the bourse in the past three months. It has appreciated 24.1%, significantly outperforming the industry’s average growth of 9%. We believe that the company’s notable traction across markets and good business portfolio will drive growth.
Read on to find out the key catalysts for the company right now.
Factors at Play
Fluor’s market diversity remains a key strength that helps it mitigate the cyclicality of markets in which it operates. The company’s strategy of maintaining a good business portfolio mix permits it to focus on the more stable business markets and capitalize on developing the cyclical markets at suitable times. The long-term prospects of the company also remain strong with existing growth opportunities in renewable energy, gas-fired combined cycle generation and air emissions compliance projects for existing coal-fired power plants.
The company being an industry leader in nuclear remediation at government facilities throughout the United States is anticipated to benefit from the rising demand for energy across the globe. Further, the company remains optimistic about its end markets, including mining. This is due to leading indicators for future capital spending like industrial production and capacity utilization are improving in several regions and industries, which signal higher capital spending.
Moreover, the company maintains a strong focus on enhancing competitive position in the market through prudent leadership initiatives and strategic alliances. For instance, the company’s restructuring initiative under construction and fabrication operations is expected to improve control and delivery of projects, consequently enhancing client satisfaction. This apart the acquisition of Stork Holding B.V. last year has significantly boosted the top line over the past few quarters. Such strategic acquisitions and collaborations are expected to be accretive to Fluor’s financials and contribute to long-term growth.
Despite these positives, the company is facing a dearth of engineering and new projects in recent times, which has hurt growth prospects significantly. Presently, the company’s margins are under pressure as it is transitioning from higher margin engineering to lower margin construction activities, particularly related to Energy & Chemicals & Mining segment.
This apart, volatility in commodity prices, and the cyclical nature of the company’s commodity-based business lines, poses significant challenges in the forthcoming quarters. Going forward, it believes that clients of Energy, Chemicals and Mining segment will maintain a cautious approach while taking investment decisions which will add to woes.
Considering growth drivers and the risks that the company faces, we have a Zacks Rank #3 (Hold) on Fluor.
Stocks to Consider
Some better-ranked stocks from the same space include Thor Industries, Inc. (THO - Free Report) , NVR, Inc. (NVR - Free Report) and Rayonier Inc. (RYN - Free Report) . While Thor Industries sports a Zacks Rank #1 (Strong Buy), NVR and Rayonier carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thor Industries has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 15.3%.
NVR has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 17.2%.
Rayonier has outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 96%.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>