Fluor Stock Plunges: Is it Time to Dump or Buy?

Fluor's stock plummeted 27.7% in August due to weak end markets and a 12% year-over-year decline in backlog. The company's Q2 revenue fell 6%, and adjusted EPS dropped 49%. Fluor's business is under pressure, but it could mint money from its stake in NuScale Power, which develops small modular reactors. Investors should wait for end markets to recover before placing a bet.

Fluor Corporation's (NYSE: FLR) stock experienced a significant downturn in August, plunging 27.7% from its peak in July. The decline was primarily attributed to weak end markets and a 12% year-over-year decrease in the company's backlog. Fluor reported a 6% decrease in Q2 revenue and a 49% drop in adjusted earnings per share (EPS) [1].

The company's core business, which includes engineering, procurement, and construction (EPC) and project management services for diverse industries, faced challenges due to softness in oil and gas, battery chemicals, and mining markets. Higher costs related to subcontractor errors on three infrastructure projects and an unexpected arbitration ruling in Mexico also contributed to the financial strain [1].

Fluor's outlook for the year was revised downward. The company slashed its adjusted EPS guidance for 2025 to $1.95 to $2.15 from a previous forecast of $2.25 to $2.75. This was due to "client hesitation around economic uncertainty" [1].

However, Fluor's stake in NuScale Power, a company developing small modular reactors (SMRs), presents an opportunity. NuScale Power shares have surged 350% in the past year, with Fluor converting 15 million Class B NuScale shares to Class A shares in August. These shares can be sold over the next 30 days, up to 5% at a time, potentially generating substantial revenue for Fluor [1].

Despite the potential windfall from NuScale, investors may want to wait for Fluor's end markets to recover before placing a bet on the stock. The Motley Fool Stock Advisor analyst team did not include Fluor in their list of the 10 best stocks to buy now, citing the company's near-term challenges and the potential for further market volatility [2].

In conclusion, while Fluor's business is currently under pressure, its stake in NuScale Power offers a potential revenue stream. Investors should closely monitor the recovery of Fluor's end markets and consider the long-term implications of NuScale's growth before making a decision to invest.

References:
[1] https://www.mitrade.com/insights/news/live-news/article-8-1092694-20250903
[2] https://www.aol.com/why-did-fluor-stock-nosedive-082400382.html