Should I Buy Fluor Corporation (FLR)? Finance YouTuber Analysis

The YouTuber suggests Fluor Corporation, an engineering and construction company, as a buy. The company faced issues with fixed-price contracts during inflation but has largely renegotiated them, with most new contracts being reimbursable (cost-plus-profit). This shift is expected to significantly boost margins and earnings, with projected EBITDA increasing from $350 million to $900 million by 2028. The company is also executing a massive share repurchase program, reducing share count by 25% over two years, indicating management believes the stock is undervalued.

“Si vemos las cuentas de fluor, vemos algo muy similar. Eh, en 2021, 22, 23 hizo mínimo de márgenes. 2,6 0.1, un beneficio evita de 350 millones, pero eso de repente este año va a subir a 540, el año que viene a 600 y ya se va a estabilizar y va a hacer que el beneficio antes de impuestos pase de 200 millones 270 a casi 600 millones”

The YouTuber highlights Fluor Corporation, an infrastructure design company, as an attractive investment. It trades at a P/E multiple of only 13x earnings, which is significantly below the market average of 23x, suggesting it is undervalued despite its essential role in infrastructure development.

“Por ejemplo, Fluor Corporation, que se dedica al diseño de infraestructuras con un múltiplo de tan solo 13 veces beneficios.”

The YouTuber recommends Fluor Corporation, a large international engineering and construction firm. It is expected to see 12% sales growth and a doubling of earnings this year, trading at a very cheap price-to-sales ratio. However, its operating margin is very low, indicating poor profitability, despite having a strong net cash balance sheet.

“FL Corporation tier flr one of the larger companies on the list with $5.3 billion in market cap with really an international presence that spans the range from engineering and construction”

The YouTuber is bullish on Fluor Corporation, citing its position as a large engineering and construction firm poised to benefit from the recently signed $1.2 trillion infrastructure bill. Despite current low earnings and negative revenue growth, he believes the infrastructure spending will act as a positive catalyst, improving sales and earnings. The company also has a strong balance sheet with significant cash reserves.

“I think that's going to be an upside catalyst for companies like this especially fleur which is one of the best of the breed.”