We had a deep discussion on Hurricane Stocks in the Member Chat Room and we decided FLR would be a good way to go, so I had Boaty do a deep analysis and we turned that into a Top Trade:
🚢 Based on the provided financial data and market information for Fluor Corporation (FLR), here’s a deep dive analysis for an investor’s report:
1. Business Overview:
Fluor Corporation is a global engineering and construction firm that provides services across various industries, including energy, infrastructure, and government projects.
2. Financial Performance:
– Revenue: $15.47 billion in FY 2023, up from $13.74 billion in FY 2022, showing solid growth.
– Net Income: $83 million in FY 2023, up from $73 million in FY 2022, indicating improved profitability.
– EPS: $0.55 in FY 2023, slightly up from $0.51 in FY 2022.
3. Balance Sheet:
– Cash and Short-Term Investments: $2.59 billion as of FY 2023 end.
– Total Assets: $6.97 billion
– Total Liabilities: $4.92 billion
– Stockholders’ Equity: $1.94 billion
4. Cash Flow:
– Operating Cash Flow: $212 million in FY 2023
– Free Cash Flow: $106 million in FY 2023
5. Valuation Metrics:
– Current Market Cap: $8.20 billion
– P/E Ratio: 21.35 (trailing), 15.35 (forward)
– EV/EBITDA: 14.96
– Price to Book Ratio: 3.83
6. Growth Prospects:
– Analyst forecasts suggest a 5-year EPS growth rate of 45.19% and revenue growth of 6.31%.
– The company’s focus on energy transition and infrastructure projects positions it well for future growth.
7. Risks:
– Cyclical nature of the engineering and construction industry
– Exposure to large, complex projects that can impact profitability if not managed effectively
– Geopolitical risks due to global operations
Current Situation:
- Current Stock Price: $49.13
- Current P/E Ratio: 21.02
- Forward P/E Ratio: 15.03
Revised Valuation Estimate for January 2026:
- EPS Growth:Using the projected 45.19% 5-year growth rate
- Current EPS (based on current price and P/E): $49.13 / 21.02 = $2.34
- Estimated 2025 EPS: $2.34 * (1.4519^2) = $4.93
- Forward P/E:Current forward P/E is 15.03
- Assuming this remains stable:
- Estimated 2026 Stock Price: $4.93 * 15.03 = $74.10
Revenue Growth:
- With a 6.31% annual growth rate
- Current Revenue (TTM): $15.74 billion
- Estimated 2025 Revenue: $15.74 billion * (1.0631^2) = $17.78 billion
Market Sentiment:
- Given the company’s improved performance and strategic positioning, we might see a slight expansion in the P/E ratio.