Fluor Corp (FLR)

[eFinanceMarkets]

Fluor upgraded to Buy from Hold at Canaccord after Q1 earnings swoon

Fluor (FLR -0.8%) is upgraded to Buy from Hold with a $55 price target at Canaccord Genuity following its substantial Q1 earnings miss and full-year guidance cut.

Canaccord says it is not certain the shares have hit bottom, but feels strongly that the risk/reward proposition following an 8% YTD decline is highly attractive, and that mid-cycle EPS power is arguably $3.50, implying a current 13.8x multiple.

The firm says FLR is still the industry bellwether despite the disappointing quarter, with top-tier execution capabilities in end-markets with compelling long-term prospects, and the ~2% dividend yield, 10% TTM FCF yield, and $614M in net cash on the balance sheet provide measures of downside support.