Fluor (FLR 0.07%), one of the world's largest engineering and construction firms, saw its stock rise 120% over the past five years, outpacing the S&P 500's 70% gain. But can it continue to outperform the market over the next five years?
What happened to Fluor over the past five years?
From 2020 to 2025, Fluor weathered a major crisis, stabilized its business, and faced new macro headwinds. In 2020 and 2021, it struggled with delays, cost overruns, and execution issues during the pandemic, and it racked up steep losses on fixed-price megaprojects.
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From 2021 to 2023, Fluor shifted from fixed-price megaprojects to reimbursable ones, in which the client pays all labor, materials, and equipment costs, plus an additional fee. It avoided and exited its riskier lump-sum projects, and it focused on building a higher-quality backlog across the energy, infrastructure, and government sectors. It also streamlined its spending, improved its balance sheet, and addressed its execution issues.
As its business stabilized, more investors paid attention to its stake in NuScale (SMR +1.63%), an emerging producer of small modular reactors (SMRs) for nuclear plants. That stake became increasingly valuable as the power-hungry cloud and AI markets expanded. Fluor owned over half of NuScale's shares before it went public via a merger with a special purpose acquisition company (SPAC) in 2022, and it still owned nearly 40% of its shares in late 2025.
NYSE: FLR
Key Data Points
In 2024 and 2025, Fluor faced new execution issues and cost overruns, and its client spending became less predictable in the messy macro environment. It also took a big one-time hit from a legal payment to Santos, an Australian oil and gas exploration and production company. At the same time, its gradual sales of NuScale's high-flying shares further distorted its earnings.
What's the bull case for the next five years?
Analysts expect Fluor to return to profitability in 2026, then grow EPS at a 16% CAGR through 2028 as its business stabilizes. That stabilization should be driven by the ongoing expansion of its backlog -- which reached $25.5 billion at the end of 2025 -- with more reimbursable contracts (over 80% of its backlog) as it reduces its exposure to fixed-price megaprojects. That shift will reduce its near-term margins but make them far more predictable over the long term.
Meanwhile, the secular expansion of the cloud, AI, government, industrial, and nuclear markets could spark a multi-year capex "supercycle" in new construction and engineering projects. As those tailwinds boost its revenue and earnings, it will likely continue to sell NuScale shares and pour much of that cash into buybacks -- which would further boost its EPS.
If Fluor matches analysts' estimates through 2028, continues to grow its EPS at a 15% CAGR through 2031, and still trades at 18 times its current year's earnings, its stock could more than double to about $100 over the next 5 years. That rally could keep it ahead of the S&P 500, which has generated an average annual return of about 10% since its inception.
