Fluor Surges 5.56% Intraday Amid Strategic Shifts, Despite 6% Revenue Drop

Fluor Corporation (FLR) shares surged 5.56% intraday on Thursday, reaching a peak not seen since October 2025, despite closing the session with a 1.08% gain. The rally reflects renewed investor optimism amid strategic shifts and valuation debates, though underlying operational challenges persist.

Recent quarterly results revealed a 6% year-over-year revenue decline and a 49% drop in adjusted earnings per share, driven by weakening demand in oil and gas, battery chemicals, and mining sectors. Sector-specific headwinds, including project delays and supply chain bottlenecks, have compounded these issues. Fluor’s 12% year-over-year backlog decline underscores near-term revenue risks, prompting revised 2025 guidance. However, analysts argue the stock is undervalued at $49.89, citing potential in high-margin infrastructure projects and small modular reactor (SMR) initiatives.

Strategic realignment efforts highlight Fluor’s pivot to SMRs and grid modernization, with $2.4 billion in SMR-related backlog. Cost-cutting measures, including $163 million in debt reduction and $142 million in buybacks, aim to stabilize finances. Yet risks linger: unresolved legal disputes, such as a $790 million claim from Santos Ltd., and insider selling of $5.4 million since 2024, raise concerns about management confidence. Backlog volatility, with a 17% year-over-year decline in new awards, further complicates recovery prospects.

Upcoming catalysts, including U.S. Nuclear Regulatory Commission (NRC) approval for SMRs and Q2 2025 earnings, will test Fluor’s turnaround strategy. While institutional investors remain divided, the company’s $2.43 billion cash reserves and debt-free near-term profile offer some downside protection. For now, the rally appears speculative, hinging on execution of high-margin projects and resolution of legal overhangs.