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On Monday, Citi analysts, led by Andrew Kaplowitz, increased their price target on Fluor Corporation (NYSE:FLR) shares to $47.00, up from the previous target of $46.00. The firm maintained a Buy rating on the stock. According to InvestingPro data, Fluor appears undervalued at its current price of $35.77, with the stock trading at a notably low P/E ratio of 3.36. Kaplowitz provided a positive outlook on Fluor’s first-quarter performance of 2025, highlighting the company’s solid book-to-burn ratio of approximately 1.5 times and financial results that surpassed expectations.
Fluor reported an adjusted EBITDA of $155 million, which was above Citi’s estimate of $132 million, and an adjusted EPS of $0.73, compared to the estimated $0.51. The company’s total EBITDA for the last twelve months stands at $518 million, supporting its "GREAT" financial health score on InvestingPro. The analyst noted, however, that the quarter’s results included several one-time factors, such as profit pull-forward due to project descoping.
Despite the positive aspects of the quarter, Fluor faced several challenges. The company set aside reserves for some projects, did not win the recompete for the Strategic Petroleum Reserve contract, which they are currently protesting, and saw a slowdown in construction activity on the Dow project due to client-driven issues. These headwinds were acknowledged amidst a backdrop of broader macroeconomic uncertainty, particularly concerning tariffs and client Final Investment Decisions (FIDs).
Nevertheless, Fluor reaffirmed its full-year 2025 guidance. The Citi analyst pointed out Fluor’s robust backlog, valued at approximately $29 billion, of which around 79% is reimbursable work. Kaplowitz suggested that Fluor’s focus on reimbursable contracts and early engagement with clients could provide a buffer against market volatility. With a healthy current ratio of 1.74 and strong liquidity position, InvestingPro analysis reveals 14 additional key insights about Fluor’s financial strength and market position, available in the comprehensive Pro Research Report. However, he also conceded that, in the short term, Fluor’s stock might remain sensitive to macroeconomic sentiment and the company’s ability to reach execution milestones.
In other recent news, Fluor Corporation announced its first quarter 2025 financial results, reporting an adjusted earnings per share (EPS) of $0.73, which significantly exceeded analyst expectations of $0.50. However, the company’s revenue came in at $4 billion, slightly missing the projected $4.18 billion. Despite the revenue shortfall, Fluor’s adjusted EBITDA saw a notable increase to $155 million from $88 million in the same quarter of the previous year. The company maintains a robust project backlog of $28.7 billion, reflecting ongoing strategic projects in life sciences and infrastructure. Analysts from Vertical Research Partners and Truist Securities have shown interest in Fluor’s earnings potential and cash flow guidance, noting the company’s strong start to the year. Fluor’s management remains confident in its project pipeline, despite some clients requiring more certainty due to economic conditions. The company also announced expectations for adjusted EBITDA to range between $575 million and $675 million for 2025, along with an anticipated revenue growth of approximately 15%. These developments indicate Fluor’s strategic focus on high-margin sectors and its ongoing efforts to enhance project execution capabilities.
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