Does Fluor’s (FLR) NuScale Share Sale Signal a Shift in Its Capital Allocation Priorities?

• Fluor Corporation recently completed the sale of 15 million shares of NuScale Power Corporation and announced that most proceeds will go toward its ongoing share repurchase program.
• Despite selling a portion of its NuScale holdings, Fluor continues to hold 111 million Class B units and is actively seeking ways for shareholders to benefit more directly from this investment.
• We'll examine how Fluor’s focus on share repurchases following its NuScale share sale may alter its longer-term investment outlook.

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Fluor Investment Narrative Recap

As a Fluor shareholder, you need to have confidence in the company’s ability to convert its significant backlog and client wins into steady cash flow, while managing exposure to project delays and cost overruns. The recent sale of 15 million NuScale shares, with proceeds directed toward further share repurchases, does not materially affect the chief near-term catalyst, Fluor’s focus on improving earnings through cash generation, or lessen the short-term risk stemming from unpredictability in project timing and collection of receivables.

One recent development especially connected to catalysts is Fluor’s continued execution of its share repurchase program; with over 4.7 million shares bought back in Q2 and the NuScale sale funding additional buybacks, there is clear emphasis on boosting EPS and delivering direct returns to shareholders. This approach fits alongside recent contract wins in core markets, supporting optimism that the company can achieve sustained improvements in margin and value creation for investors.

However, despite the progress on returning cash to shareholders, investors should keep in mind the contrast that Fluor is still contending with delays and increased costs on large projects, especially considering ...

Read the full narrative on Fluor (it's free!)

Fluor's narrative projects $19.6 billion in revenue and $511.6 million in earnings by 2028. This requires 6.2% yearly revenue growth and a $3.6 billion decrease in earnings from the current $4.1 billion.

Uncover how Fluor's forecasts yield a $49.89 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Six community members valued Fluor between US$45.61 and US$60, showing a wide span of fair value opinions. While Fluor emphasizes returns through cash flow and share buybacks, shifting project timelines continue to influence broader outlooks, see how these perspectives compare.

Explore 6 other fair value estimates on Fluor - why the stock might be worth just $45.61!

Build Your Own Fluor Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Fluor research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Fluor research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Fluor's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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