We believe Fluor is currently at an attractive entry point for patient investors willing to endure short-term volatility. Investor impatience regarding the lengthy process of monetizing Fluor’s equity interest in NuScale has grown, yet we feel the market is undervaluing the potential upside. Presently, Fluor is trading at what we consider a fair price for the company, excluding its NuScale stake, effectively providing investors with a free call option on NuScale’s success at the current stock price. Additionally, although there is a projected decline in backlog for 2024 and ongoing cash burn from legacy projects extending into 2025, we believe the market fails to recognize the company’s operational improvements. Fluor has significantly mitigated the risk associated with its backlog, and we think the enhancement in cash flows positions the company to accelerate share repurchases and possibly reinstate the dividend.
MarketAnalysis
