Fluor (FLR): Assessing Valuation After Lawsuits and a Downbeat Outlook Raise Investor Concerns

Fluor (FLR) is getting extra attention after Starboard Value disclosed a nearly 5% stake and signaled plans to advocate for changes designed to increase shareholder value. Investors are watching to see what actions Starboard might push for next.

See our latest analysis for Fluor.

This surge of activist attention comes shortly after a challenging period for Fluor. While the share price is up over 7% in the past month, the stock is still down nearly 14% over the past 90 days and has posted a 1-year total shareholder return of -10.8%. This comes despite a strong 324% total shareholder return over five years. With recent lawsuits and disappointing results weighing on sentiment, momentum looks uncertain. However, activist involvement could signal an inflection point for longer-term investors.

If these shifts in Fluor’s story have you thinking bigger, it might be the perfect moment to discover fast growing stocks with high insider ownership.

With Fluor facing legal challenges, a history of recent underperformance, and an activist calling for change, the key question is whether shares now offer hidden value or if the market is already factoring in any growth potential.

Most Popular Narrative: 4% Undervalued

Compared to the recent closing price of $47.88, the most widely followed narrative places Fluor’s fair value at $49.89. This suggests the market may be overlooking potential upside. The stage is set for a close look at the drivers behind this cautious optimism.

Fluor's shift from revitalizing the capital structure to focusing on generating cash and earnings under its new strategy could drive earnings growth and improve net margins.

The strong backlog and significant new awards in life sciences, infrastructure, and key projects in Urban Solutions are expected to boost future revenue and earnings.

Read the complete narrative.

What could lead analysts to see value, even as expectations for future profits shrink? Hints lie in ambitious revenue targets, evolving margin projections, and a planned boost in share buybacks. Wondering what financial moves might justify that higher price tag? Unlock the full narrative and see the calculation for yourself.

Result: Fair Value of $49.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent project delays and continued economic uncertainty could undermine Fluor's expected earnings growth and disrupt the current optimistic outlook.

Find out about the key risks to this Fluor narrative.

Another View: SWS DCF Model Tells a Different Story

While analysts see Fluor as modestly undervalued based on future earnings and market ratios, the SWS DCF model suggests the current share price is actually running slightly above fair value. This contrast highlights just how much depends on which assumptions play out. Is the market already too optimistic, or still missing hidden upside?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Fluor for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Fluor Narrative

If you want to test your own assumptions or explore alternative scenarios, you can quickly build your own valuation view and narrative in just minutes by using Do it your way.

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.

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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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