Analyst Note
| Krzysztof Smalec, CFA |We expect to lower our $19 fair value estimate for Fluor by around 5% after the engineering and construction firm reported its fourth-quarter 2020 earnings. Fluor’s fourth-quarter revenue of $3,656 million fell short of the FactSet consensus estimate of $3,714 million, but more importantly, the company issued disappointing guidance for full year 2021. While Fluor maintained its long-term target adjusted EPS range of $3.00 to $3.50 by 2024, its 2021 adjusted EPS guidance range of $0.50 to $0.80 came in below our previous $1.00 estimate. Our fair value reduction reflects more muted near-term revenue growth and operating margin projections.