Sterne Agee Reiterates Buy Rating, $81 PT On FLR

Sterne Agee is reiterating its Buy rating and $81 PT on shares of Fluor Corporation FLR.

“Meetings with FLR management confirmed our view that the company remains on track to end 2011 with backlog above the prior peak level which should set the company up for new peak EPS in 2012,” Sterne Agee writes.

“Although competition in the Middle East Oil & Gas market remains intense, FLR has backlog growth opportunities in many other regions and markets where pricing is currently more favorable.

“FLR's flexible model provides the company with ample capacity to meet demand as it shifts between various end markets. Based on lower volume of awards and a tougher bidding environment in much of ‘09-‘10, Oil & Gas margin is likely to be closer to the 4Q10 level than we had previously anticipated; however, better backlog burn in other areas (Mining) offsets the full-year EPS impact.”

Fluor Corporation closed Thursday at $66.10.