Fluor Corporation FLR has secured a significant joint venture contract with Hatch for BHP’s Olympic Dam Smelter & Refinery Expansion Project in South Australia. The contract, focused on engineering, procurement, and construction management, marks a key opportunity for Fluor to strengthen its mining and metals business.

The project remains subject to a final investment decision by BHP, which is expected in the first half of 2027. Fluor will recognize its undisclosed share of the contract value in the fourth quarter of 2024.

Copper Demand and Fluor’s Growth Potential

The Olympic Dam expansion aligns with the increasing global demand for copper, driven by the energy transition and electrification trends. BHP’s goal is to boost refined copper cathode production to over 500,000 tonnes by the early 2030s and potentially 650,000 tonnes by the mid-2030s.

Fluor’s involvement in this long-term initiative positions the company to benefit from sustained mining infrastructure spending. As copper plays a critical role in electric vehicles, renewable energy, and grid expansion, Fluor’s expertise in large-scale industrial projects gives it a competitive edge in securing future contracts.

This contract enhances Fluor’s pipeline of high-value projects, reinforcing its role in the resource sector. If BHP proceeds with full-scale expansion, Fluor could see substantial revenue growth from this multi-phase project. Given the increasing importance of copper in a decarbonizing world, Fluor’s strategic partnership with BHP may drive long-term shareholder value. Investors should watch for updates on BHP’s investment decision and Fluor’s continued execution in the mining sector.

Fluor’s Share Price Performance

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Shares of FLR have gained 27.7% in the past year, outperforming the Zacks Engineering - R and D Services industry’s 13.4% growth. The ongoing backlog strength, market diversity and Building a Better Future strategy are positioning the company well for an outperformance in the upcoming period.

Fluor has been witnessing business prospects and a demand uptrend in various sectors, including the chemicals sector, energy transition, fuel production, mining and metals, and big data. This growing trend is reflected in the solid uptick in new awards and backlog value.

During the third quarter of 2024, the company secured new awards worth $2.7 billion. At the end of Sept. 30, 2024, the consolidated backlog was $31.32 billion, up 20.5% from $26 billion a year ago. This substantial backlog underscores the continued strong demand for Fluor's services and the recognized value it brings to its clients. The company continues to witness strong demand for its services, pushing new award margins above its strategic segment margin range of 4-6%.

FLR’s Zacks Rank & Key Picks

Fluor currently carries a Zacks Rank #4 (Sell).

Here are some better-ranked stocks from the Construction sector.

Weyerhaeuser Company WY currently sports a Zacks Rank of 1 (Strong Buy). WY delivered a trailing four-quarter earnings surprise of 41.6%, on average. The stock has lost 5.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for WY’s 2025 sales and earnings per share (EPS) indicates an increase of 8.5% and 58.5%, respectively, from a year ago.

Louisiana-Pacific Corporation LPX currently carries a Zacks Rank of 2 (Buy). LPX delivered a trailing four-quarter earnings surprise of 30.7%, on average. The stock has gained 79.2% in the past year.

The consensus estimate for LPX’s 2025 sales indicates an increase of 4.3%, while the estimate for EPS implies a decline of 4.9% from a year ago.

Trex Company, Inc. TREX currently carries a Zacks Rank of 2. TREX delivered a trailing four-quarter earnings surprise of 9%, on average. The stock has lost 11.8% in the past year.

The consensus estimate for TREX’s 2025 sales and EPS indicates an increase of 7.1% and 8.3%, respectively, from a year ago.

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