2 Things to Know Before Buying Fluor

As Fluor (NYSE: FLR) heads into 2026, the Texas-based construction and engineering company is midway through one of the most consequential resets in its history. The 113-year old company is unwinding legacy risks, reshaping its project mix, and unlocking more than a billion dollars tied up in its NuScale Power (NYSE: SMR) stake -- all while trying to steady a volatile stock that's seen 50% peak-to-trough price swings over the past year.

While Fluor has halved its losses from early spring, it still sits with a 15% year-to-date decline, as well as being 60% below its all-time high of $101 hit in 2008. This, at a time when all five of the other construction and engineering stocks in the S&P MidCap 400 (NYSEMKT: MDY) are up anywhere from 20% to 120% this year and have each set new all-time highs within the past month.

But if you look out a year or two, the Fluor story gets more interesting, and potentially rewarding, for patient investors who must keep two key facts in mind.

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1. Execution of Fluor's reorganization plan is key

Fluor's biggest problem with investors is consistency. Q3 marked the eighth straight quarter in which revenue fell short of analysts' expectations, down 18% year over year to $3.4 billion. Even though the bottom line offered a bright spot with adjusted earnings per share up 33% to a better-than-expected $0.68, earnings day continues to be full of surprises -- many of which aren't the good kind.

Because Fluor deals in huge, multiyear projects, its backlog of work is closely followed. On that front, the company just reported that it booked $3.3 billion in new contracts in Q3, which lifted its total backlog to $28.2 billion.

The company also highlighted the fact that 82% of that work is reimbursable, versus fixed-price, which means Fluor bills -- and is paid for -- its actual costs and is not responsible for cost overruns. It's part of a risk-reducing shift and long-term company strategy.

2. The NuScale windfall

Another huge part of the Fluor story right now is its newly announced exit strategy from NuScale Power, the small modular reactor company that's riding a wave of nuclear demand needed to power scores of planned new AI data centers. NuScale shares have surged more than 600% in two years, and Fluor is beginning to cash in on a stake it has owned for over 10 years.

Fluor announced it had raised over $600 million from its first stock sale in October, and that it also planned to monetize its remaining 39% stake by February -- worth an estimated $800 million -- and use most of the proceeds to buy back its own shares. While this cash injection has improved its balance sheet, the NuScale windfall should be seen as a catalyst rather than a cure-all.

Bottom line

Despite its age and long heritage, Fluor is a transition story with real potential and risks. The company is improving its backlog mix, tightening risk controls, and unlocking meaningful value from NuScale, but the execution track record is still shaky. If Fluor can fix that, it won't need to crush expectations to please investors, but rather, just stop missing them.

Matthew Nesto has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.