When it comes to companies that may be in store for a boost from President Biden’s $1.2 trillion infrastructure bill, Fluor Corporation (FLR FLR - Free Report)  will be one to watch with its stock landing a Zacks Rank #1 (Strong Buy) and the Bull of the Day.

Through several subsidiaries, Fluor is a provider of engineering, procurement, construction, and maintenance services (EPCM) with FLR shares looking very attractive as the Zacks Engineering-R and D Services Industry is currently in the top 21% of over 250 Zacks industries.

Steady Growth

Fluor’s total sales are now projected to rise 12% in fiscal 2023 and jump another 9% in FY24 to $16.88 billion. More impressive, Fluor’s annual earnings are forecasted to soar 188% this year to $2.35 per share versus $0.82 a share in 2022. Plus, FY24 EPS is expected to expand another 12%.

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Furthermore, over the last quarter, FY23 earnings estimate revisions have now soared 18% while FY24 EPS estimates are up 4%.

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Valuation Discounts

Making Fluor’s stock a very sound investment is that the company’s valuation is reasonable considering its growth prospects. At 16.6X forward earnings, Fluor’s stock trades at a 31% discount to the Zacks Engineering-R and D Services industry average of 24.1X with some of the other notable players in the space being AECOM (ACM - Free Report) , Altair Engineering (ALTR - Free Report), and Sterling Infrastructure (STRL - Free Report) ).

Fluor’s stock also trades nicely beneath the S&P 500’s 22.2X. More enticing is that Fluor shares trade well below their decade-long high of 41.8X forward earnings and at a slight discount to the median of 17.4X.  

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Notably, Fluor’s price-to-sales ratio of 0.43X is comfortably below the optimum level of less than 2X with its industry average at 1.4X and the S&P 500 currently at 3.9X.

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Recent Performance & Momentum

Fluor’s stock has risen +7% in the last two months seeing strong momentum after third quarter earnings of $1.02 per share most recently crushed the Zacks Consensus of $0.52 a share by 85% in early November.

This led to Fluor raising its full-year EBITDA and adjusted EPS guidance with shares now up +13% in 2023. Even better, over the last three years, Fluor’s stock has now soared +136% to largely outperform the broader indexes and even top its Zacks Subindustry’s +87%.

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Bottom Line

Fluor’s stellar price performance over the last few years looks likely to continue into 2024 with its stock starting to check the boxes in many fundamental areas. In addition to its strong buy rating, Fluor’s stock currently has an overall “A” Zacks VGM Style Scores grade for the combination of Value, Growth, and Momentum.

Investors who haven’t taken notice may want to do so as Fluor’s stock hit 52-week highs of $40 a share last week and looks poised to reach higher highs.

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