Fluor Stock Has Been Volatile Lately. Is the Texas-Based Company Worth the Risk?

Core Viewpoint - Fluor, a Texas-based construction and engineering company, has experienced significant stock volatility in 2025, but its strategic focus on nuclear power is attracting renewed investor interest [1][2]. Company Performance - Fluor's stock has fluctuated dramatically, with a 40% decline in April, a 20% gain in July, and a subsequent 20% drop in August, leading to a current year-to-date loss of 7% [2]. - The company has a market capitalization of $7 billion, making it the smallest among six Construction & Engineering stocks in the SPDR S&P MidCap 400 ETF Trust, and it remains the only one with a negative performance for the year [3]. - Fluor's stock is approximately 55% below its all-time high of $102 from 2008 and about 20% below its 52-week high of $57.50 reached in late July [4]. Financial Results - Fluor missed revenue estimates for the eighth consecutive quarter, reporting a 17% decline in revenue to $3.3 billion, significantly below the average estimate of $4.2 billion [5]. - Adjusted earnings per share increased by 33% to $0.68, surpassing analysts' expectations of $0.45 [5]. - The company secured $3.3 billion in new contracts in Q3, raising its backlog to $28.2 billion, with 82% of this backlog being reimbursable contracts [6]. Strategic Moves - Fluor plans to monetize its remaining 39% stake in NuScale, a company specializing in small modular reactors, which has seen its stock rise over 600% in the past two years due to increased demand for nuclear energy [7]. - After selling a 15 million-share block of NuScale for $605 million, Fluor aims to liquidate the rest of its stake by the end of Q2 2026, expecting to raise $800 million by February to support a stock-buyback program [8][9]. Market Outlook - Analysts have mixed ratings on Fluor, with five recommending a buy and five suggesting a hold, and an average 12-month price target of $51, indicating a potential upside of about 12% from the current price [13]. - The company is projected to achieve earnings growth of approximately 7% and an 8% increase in revenue for the full year 2026 [13]. - Fluor's forward price-to-earnings ratio of 22x places it in the top quintile of its historical range, indicating a higher valuation compared to 80% of the past decade [12].