We believe the recent drop in Fluor’s (FLR) share price is an overreaction to disappointing first-quarter results. While we reduced our fair value estimate to reflect the quarterly shortfall and our updated forecasts, we still believe investors have an excellent opportunity to own an industry leader trading at a modest valuation near a cyclical inflection point in industry demand.
Fluor reported a cost overrun at a gas-fired Florida power project and a $1.00 reduction in its 2018 earnings per share outlook to $2.10-$2.50. We believe the cost issue is specific to the project and the region and does not impair Fluor’s broader project portfolio.
David Silver, CFA, CPA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.