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Here's Why You Must Add Fluor (FLR) to Your Portfolio Now
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Fluor Corporation (FLR - Free Report) has been notably benefiting from consistent contract wins that are aiding its backlog growth and, thus, its long-term growth prospects. Furthermore, its new “Building a Better Future” strategy aligns with its focus on diversifying its business portfolio.
Backed by these tailwinds, shares of this Zacks Rank #1 (Strong Buy) company have gained 27.5% in the past six months, strongly outperforming the Zacks Engineering - R and D Services industry’s 4% growth.
This growth trend is further solidified by FLR’s 2024 earnings estimates, which moved north to $2.71 per share from earnings of $2.63 per share over the past 30 days. This reflects 11.1% year-over-year growth on 9.3% higher revenues. The company also delivered a trailing four-quarter earnings surprise of 37.5%, on average.
Image Source: Zacks Investment Research
Moreover, its VGM Score of A, backed by Growth and Momentum Scores of A, adds to the uptrend. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and the continuation of an outperformance in the near term.
Factors Bolstering FLR’s Growth Potential
Consistent Contract Wins: Fluor's efficient performance and diversified service portfolio have increased the demand pattern for its services. This is reflected in the consistent flow of new contracts and extensions of the existing awards. In 2023, the company garnered a mix of 20 new contracts and extensions of the existing ones.
Despite the competitive landscape, the company has maintained its momentum. This positive trend further highlights its ability to deliver value and meet the demands of its clientele.
Growing Backlog Levels: Fluor showcases a robust pipeline prospect, given the positive demand trend for its services. At the end of the third quarter of 2023, the company’s consolidated backlog sequentially grew to $26 billion from $25.48 billion. It is currently monitoring a list of potential projects that exceed its existing backlog by more than 15 times. The primary opportunities driving this demand include those in the chemicals sector, closely followed by fuel production, as well as mining and metals.
Diversified Business Portfolio: Fluor intends to drive growth across its portfolios by enhancing markets outside of the traditional oil and gas sector, including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and mission solutions. Its 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. Going forward, FLR has plans to implement data analytics in projects, thus minimizing risks and maximizing returns. These initiatives give Fluor an extra edge and a distinct competitive advantage.
Higher ROE: Fluor’s trailing 12-month ROE is 22.8%, higher than the industry’s 16.3%. This implies that the company is getting more efficient at creating profits and increasing shareholders’ value with respect to its industry.
Other Stocks Worth Considering
Here are some other top-ranked stocks from the Construction sector.
It has a trailing four-quarter earnings surprise of 35.6%, on average. Shares of MPTI have surged 306% in the past year. The Zacks Consensus Estimate for MPTI’s 2024 sales and earnings per share (EPS) indicates a rise of 12.5% and 13.4%, respectively, from the prior-year levels.
Martin Marietta Materials, Inc. (MLM - Free Report) currently sports a Zacks Rank of 1. MLM delivered a trailing four-quarter earnings surprise of 37.3%, on average. The stock has gained 38.4% in the past year.
The Zacks Consensus Estimate for MLM’s 2024 sales and EPS indicates growth of 9.7% and 14%, respectively, from a year ago.
Taylor Morrison Home Corporation (TMHC - Free Report) currently carries a Zacks Rank #2 (Buy). TMHC delivered a trailing four-quarter earnings surprise of 17.5%, on average. The stock has gained 55.1% in the past year.
The Zacks Consensus Estimate for TMHC’s 2024 sales indicates growth of 0.8%, while EPS indicates a decline of 6.6%, from a year ago.
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Here's Why You Must Add Fluor (FLR) to Your Portfolio Now
Fluor Corporation (FLR - Free Report) has been notably benefiting from consistent contract wins that are aiding its backlog growth and, thus, its long-term growth prospects. Furthermore, its new “Building a Better Future” strategy aligns with its focus on diversifying its business portfolio.
Backed by these tailwinds, shares of this Zacks Rank #1 (Strong Buy) company have gained 27.5% in the past six months, strongly outperforming the Zacks Engineering - R and D Services industry’s 4% growth.
This growth trend is further solidified by FLR’s 2024 earnings estimates, which moved north to $2.71 per share from earnings of $2.63 per share over the past 30 days. This reflects 11.1% year-over-year growth on 9.3% higher revenues. The company also delivered a trailing four-quarter earnings surprise of 37.5%, on average.
Image Source: Zacks Investment Research
Moreover, its VGM Score of A, backed by Growth and Momentum Scores of A, adds to the uptrend. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and the continuation of an outperformance in the near term.
Factors Bolstering FLR’s Growth Potential
Consistent Contract Wins: Fluor's efficient performance and diversified service portfolio have increased the demand pattern for its services. This is reflected in the consistent flow of new contracts and extensions of the existing awards. In 2023, the company garnered a mix of 20 new contracts and extensions of the existing ones.
Despite the competitive landscape, the company has maintained its momentum. This positive trend further highlights its ability to deliver value and meet the demands of its clientele.
Growing Backlog Levels: Fluor showcases a robust pipeline prospect, given the positive demand trend for its services. At the end of the third quarter of 2023, the company’s consolidated backlog sequentially grew to $26 billion from $25.48 billion. It is currently monitoring a list of potential projects that exceed its existing backlog by more than 15 times. The primary opportunities driving this demand include those in the chemicals sector, closely followed by fuel production, as well as mining and metals.
Diversified Business Portfolio: Fluor intends to drive growth across its portfolios by enhancing markets outside of the traditional oil and gas sector, including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and mission solutions. Its 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. Going forward, FLR has plans to implement data analytics in projects, thus minimizing risks and maximizing returns. These initiatives give Fluor an extra edge and a distinct competitive advantage.
Higher ROE: Fluor’s trailing 12-month ROE is 22.8%, higher than the industry’s 16.3%. This implies that the company is getting more efficient at creating profits and increasing shareholders’ value with respect to its industry.
Other Stocks Worth Considering
Here are some other top-ranked stocks from the Construction sector.
M-tron Industries, Inc. (MPTI - Free Report) presently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter earnings surprise of 35.6%, on average. Shares of MPTI have surged 306% in the past year. The Zacks Consensus Estimate for MPTI’s 2024 sales and earnings per share (EPS) indicates a rise of 12.5% and 13.4%, respectively, from the prior-year levels.
Martin Marietta Materials, Inc. (MLM - Free Report) currently sports a Zacks Rank of 1. MLM delivered a trailing four-quarter earnings surprise of 37.3%, on average. The stock has gained 38.4% in the past year.
The Zacks Consensus Estimate for MLM’s 2024 sales and EPS indicates growth of 9.7% and 14%, respectively, from a year ago.
Taylor Morrison Home Corporation (TMHC - Free Report) currently carries a Zacks Rank #2 (Buy). TMHC delivered a trailing four-quarter earnings surprise of 17.5%, on average. The stock has gained 55.1% in the past year.
The Zacks Consensus Estimate for TMHC’s 2024 sales indicates growth of 0.8%, while EPS indicates a decline of 6.6%, from a year ago.