1 Reason Now Is a Great Time to Buy Fluor (FLR) Stock

Fluor (FLR) stock has retreated approximately 17.5% year-to-date, driven by weak second-quarter results showing a 6% revenue decline and 49% earnings decrease, coupled with lowered near-term expectations, tariff impacts, and cost overruns on fixed-price contracts. Despite these challenges, the engineering and construction firm presents long-term potential, underpinned by a substantial $28.2 billion project backlog, its majority stake in NuScale Power (SMR) positioning it for AI-driven nuclear demand, and an attractive valuation with a forward P/E of 16.5 compared to its five-year average of 17.4.

Analysis

Fluor Corporation (FLR) is experiencing significant near-term pressure, evidenced by a 17.5% year-to-date decline in its share price as of September 9, 2025. This downturn is directly linked to a weak second-quarter performance, where revenue contracted 6% year-over-year and earnings fell 49%, leading to lowered near-term guidance. The operational challenges stem from two primary sources: external tariff impacts causing clients to delay projects, and internal execution issues with cost overruns on fixed-price contracts compressing profit margins. Despite these headwinds, the long-term investment case is supported by several key factors. The company holds a substantial project backlog valued at $28.2 billion, which provides a degree of forward revenue visibility. Strategically, Fluor's majority stake in NuScale Power (SMR) positions it to capitalize on the increasing demand for nuclear energy, particularly for powering AI data centers. From a valuation perspective, the stock trades at a forward P/E ratio of 16.5, which is below its five-year average of 17.4, suggesting a potential dislocation between current market sentiment and long-range fundamental value.

Key Decisions for Investors

• Long-term investors may consider the current share price weakness an attractive entry point, given the valuation is below its historical average and the stock offers strategic exposure to the nuclear power and AI infrastructure build-out.
• Investors should closely monitor upcoming earnings reports for evidence of improved margin control on fixed-price contracts and any resolution or mitigation of tariff-related project delays, as these are the key near-term risks.
• Given the execution risks inherent in the engineering and construction sector, positions in FLR should be managed with an understanding of its cyclicality, while also appreciating the potential secular tailwind from its NuScale Power holding.