Fluor’s 2021 Earnings Outlook Disappoints; Stock Slips 13%

Shares of Fluor Corporation plunged 13.3% on Friday after the multinational engineering and construction firm issued a 2021 earnings guidance that fell short of analysts’ expectations.

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Fluor (FLR) projects adjusted earnings in the range of $0.50-$0.80 per share for 2021, significantly lower than the consensus estimate of $1.10.

Furthermore, the company reported dismal 4Q results wherein revenues fell 15.9% to $3.7 billion year-on-year with a loss per share of $0.82.

For 2020, revenues dropped 9.5% to $15.7 billion year-over-year and missed Street estimates of $15.5 billion. The company posted a net loss from continuing operation of $2.09 per share, significantly higher than the consensus estimate of $1.50 loss per share. (See Fluor stock analysis on TipRanks).

Fluor’s overall 2020 financial results were negatively impacted by the COVID-19 pandemic and weak commodity prices.

On Jan. 19, Citigroup analyst Andrew Kaplowitz raised the stock’s price target to $22 (28% upside potential) from $19 and reiterated a Hold rating. Kaplowitz believes that rising oil prices, government stimulus and probable replacement of the Fixing America’s Surface Transportation Act or the FAST Act are setting the tone for strong performance for the company in 2021. However, the analyst stated that pandemic-led uncertainty remains a near-term concern.

Overall, the Street has a cautiously optimistic outlook on the stock with a Moderate Buy consensus rating based on 1 Buy and 3 Holds. The average analyst price target of $17.67 implies upside potential of about 3% to current levels. Shares are up around 56% over the last year.