FLR
Fluor Corporation
$44.87
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Fair Value
Trading 12.8% below fair value
You pay
$44.87
Bear
$44.43
Fair
$51.44
Bull
$58.44
Bear
$44.43
-1.0%
$1.70 × 14x + net cash
Fair
$51.44
+14.6%
$1.70 × 18x + net cash
Bull
$58.44
+30.2%
$1.70 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.70)
Implied Market Multiple
26.4x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $56.00 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $51.44 per share.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing