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Uncrowded Trade: Fluor's Hidden Potential Revealed
7 Dec
Summary
- Fluor secures $3.3 billion in new contracts, boosting backlog to $28.2 billion.
- Infrastructure spending is ramping up, with much IIJA funding yet to be allocated.
- Despite logistical hurdles, Fluor is poised for a revenue and profit turnaround next year.
While many popular stocks appear tempting, an uncrowded trade like Fluor (NYSE: FLR) may offer better long-term potential. The company, specializing in large-scale projects such as roads, maritime ports, and pharmaceutical factories, is well-positioned to benefit from the ongoing deployment of funds from the Infrastructure Investment and Jobs Act (IIJA).
Fluor recently reported winning $3.3 billion in new contracts, expanding its project backlog to an impressive $28.2 billion. This substantial backlog, compared to its recent quarterly revenue of $3.4 billion, indicates significant future earning potential, contingent on project commencement approvals.
Despite the inherent logistical challenges and slower growth characteristic of the heavy construction industry, Fluor is anticipated to experience a notable revenue and profit turnaround starting next year. This potential rebound, coupled with its underperformance since late last year, suggests it could be an opportune moment to consider this promising prospect.
