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On Thursday, DA Davidson revised its price target for Fluor Corporation (NYSE:FLR), a global engineering and construction firm, from $55.00 to $50.00, while retaining a Buy rating on the company’s shares. According to InvestingPro data, Fluor appears undervalued at its current price of $37.22, despite a significant YTD decline of 24.5%. The adjustment followed DA Davidson’s participation in Fluor’s Strategy Update day held in Indiana, which included a visit to the company’s significant ATLS project in Lebanon.
During the event, Fluor’s new leadership team emphasized a strategy that continues to focus on a risk-averse approach, favoring reimbursable projects. This conservative stance is supported by the company’s strong financial position, with InvestingPro analysis showing more cash than debt on its balance sheet and a healthy current ratio of 1.69. This approach is part of an effort to mitigate financial risks by ensuring compensation for actual costs incurred plus an additional fee. The leadership also outlined plans to implement a more robust policy for returning capital to shareholders in the upcoming years.
The analyst from DA Davidson highlighted the key takeaways from the Strategy Update day, which reinforced the firm’s positive outlook on Fluor. Despite the reduction in the price target, the Buy rating suggests that DA Davidson remains optimistic about the company’s future performance and potential for growth. InvestingPro subscribers can access 12 additional investment tips and a comprehensive analysis of Fluor’s financial health, which currently rates as "GREAT" with an overall score of 3.27.
In the report, the analyst stated, "We attended Fluor’s Strategy Update day in Indiana including a visit to one of the company’s major ongoing ATLS projects (Lebanon project). Messaging under its new leadership team conveys a continuation of a more risk-off approach (reimbursable pursuits) with a more intensive capital returns policy to shareholders in the coming years."
Fluor’s stock performance will continue to be watched closely by investors as the company progresses with its strategic initiatives and capital allocation plans under the guidance of its new leadership team.
In other recent news, Fluor Corporation reported revenue of $16.3 billion for the year 2024, reflecting its ongoing financial performance. The company has also announced the successful startup of the Tengizchevroil Future Growth Project at the Tengiz oil field in Kazakhstan, which is expected to significantly increase crude oil production. In personnel changes, Fluor appointed Tracey Cook as the new Chief Human Resources Officer, succeeding Stacy Dillow, whose resignation is effective on April 11, 2025. The leadership transition aligns with Fluor’s strategy to maintain its industry position.
Moreover, Fluor is involved in a major engineering contract in Romania, contributing to the construction of two nuclear reactors, with U.S. backing ensuring the project’s stability despite political concerns. DA Davidson recently adjusted its financial outlook for Fluor, lowering the stock price target to $55 from $65 while maintaining a Buy rating. The firm noted Fluor’s improved cash flow and significant growth in net cash, alongside the increased market value of its investment in NuScale.
These developments highlight Fluor’s ongoing efforts in project execution and financial management. The company’s commitment to sustainable economic development in Kazakhstan and its involvement in Romanian nuclear projects further underscore its global reach. Investors are closely monitoring these changes as Fluor continues to navigate market challenges and opportunities.
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