Fluor's Crossroads: What Investors Must Watch in 2026

The Big Picture

Fluor (NYSE: FLR), the Texas-based construction and engineering powerhouse with over a century of operations, is navigating one of its most significant transformation phases heading into 2026. The 113-year-old firm faces a critical juncture: unwinding accumulated legacy risks, recalibrating its project portfolio mix, and converting a substantial equity position in nuclear reactor innovator NuScale Power (NYSE: SMR) into liquid capital – all while managing a notoriously volatile stock price that has experienced dramatic 50% swings within a single year.

The performance gap is striking. While Fluor’s peer group within the S&P MidCap 400 construction and engineering sector has surged 20% to 120% year-to-date, each reaching fresh all-time highs within recent weeks, Fluor itself trades 60% below its 2008 peak of $101 and shows a 15% year-to-date decline. Though the company has trimmed its losses by half since spring, the market remains skeptical.

Critical Factor #1: Can Fluor Deliver on Its Operational Plan?

The company’s core credibility problem stems from a consistency gap. Q3 results exemplified this challenge: revenue contracted 18% year-over-year to $3.4 billion, marking the eighth consecutive quarter of missing analyst expectations. This represents the eighth quarter in a row where top-line guidance fell short.

However, there’s a silver lining in the adjusted earnings picture. Adjusted earnings per share jumped 33% to $0.68, beating projections. This divergence between disappointing revenue and solid bottom-line performance reveals an ongoing theme in Fluor’s narrative.

For a firm operating massive, years-long construction contracts, the project pipeline carries outsized importance for investors. Fluor’s Q3 announcement of $3.3 billion in newly secured contracts lifted its total project pipeline to $28.2 billion. More significantly, 82% of this pipeline consists of reimbursable-cost arrangements rather than fixed-price contracts. This structural shift is intentional – under reimbursable terms, Fluor recovers its actual project expenses and avoids bearing cost overrun penalties. It’s a deliberate de-risking maneuver embedded within the company’s longer-term strategic blueprint.

Critical Factor #2: The NuScale Monetization Story

The second pillar of Fluor’s near-term narrative centers on its strategic exit from NuScale Power, the small modular reactor developer benefiting from surging demand for nuclear power to supply the data centers underpinning the artificial intelligence infrastructure boom.

NuScale’s equity has appreciated more than 600% over the past two years, transforming Fluor’s long-held stake (accumulated over a decade-plus period) into a meaningful financial asset. The initial phase of this exit already generated results: in October, Fluor completed its first liquidation tranche, raising over $600 million in proceeds. Management outlined plans to divest the remaining 39% stake, which carries an estimated value of approximately $800 million, with a targeted completion date before February. The company intends to deploy the majority of these proceeds toward share repurchases aimed at enhancing shareholder value.

While the improved balance sheet from this cash infusion is tangible, viewing the NuScale windfall as a one-time adjustment is more prudent than treating it as a permanent operational solution. It’s better characterized as a strategic catalyst.

The Verdict: Transition With Uncertainty

Fluor represents a classic turnaround narrative – a long-established industrial name pursuing meaningful transformation. The company is actively improving its project mix composition, implementing tighter risk governance frameworks, and crystallizing substantial embedded value within its NuScale investment. Yet the execution history remains uneven and concerning.

The path forward depends on whether management can eliminate its pattern of disappointment. Investors don’t require the company to astonish the market with outsized surprises; they simply need Fluor to stop consistently falling short of reasonable expectations. That modest shift alone could reshape market sentiment significantly.