Collect 16% Annualized Premium on an Engineering Cannibal
Fluor is retiring 20% of its shares while the market still prices it like the company that nearly went bust. Einhorn owns it. Collect premium to wait — or own it at $35.75.
The trade: Selling a Cash Secured Put
Ticker: FLR
Current Price: ~$45.70
Expiration: September 18, 2026
Strike Price: $37.5
Strike to Current: −18%
Premium: ~$1.75
Annualized Return: ~16%
Actual price if assigned: ~$35.75
The Company
Fluor is an engineering and construction firm. It designs and builds large industrial facilities — LNG terminals, data centers, pharmaceutical plants, nuclear facilities, copper mines. Clients are energy companies, governments, and industrial operators running projects too large and technically complex to manage without a specialist contractor.
The business is sticky by design. Large projects take years to execute, and switching contractors mid-build is not a real option. Once Fluor is awarded a contract, it owns that revenue stream through completion.
The more important change is the contract structure. Fluor nearly collapsed under fixed-price contracts that left it absorbing cost overruns on projects it couldn’t control. Management rebuilt around reimbursable terms — the client bears cost inflation, not Fluor. Today 82% of the $25.5B backlog is reimbursable. The earnings volatility that defined the old Fluor is structurally reduced. The company is now generating enough cash to run a $1.4B buyback, funded largely by selling its NuScale Power stake — $1.35B received in Q1 2026 alone.
Value Investors that already own it
David Einhorn - Greenlight Capital
Lee Ainslie - Maverick Capital
Polen Capital Management
Why We Are Glad to Own It If Assigned
At an assigned cost of $35.75, we are buying a business with $25.5B in backlog, 82% of it on reimbursable terms, at a price that gives no credit for the contract structure shift, no credit for the buyback retiring 20% of shares, and no credit for exposure to end markets — LNG, data centers, nuclear, pharma manufacturing, copper — that are each seeing sustained capital investment.
Fluor also trades at a discount to peers Jacobs Solutions and AECOM, which means the rerating doesn’t require the market to be generous — only less skeptical.
Einhorn’s price target is $115. That is not our base case. But it illustrates how far the market is from pricing the current business rather than the old one. The buyback is already running. We get paid to wait.
What could go wrong
Engineering and construction execution risk is real and already visible. In Q1 2026, Fluor took a project charge that compressed adjusted EBITDA to $60M on $3.6B in revenue — a reminder that even reimbursable contracts carry dispute and execution risk. One badly structured job, a contested claim, or a project delay can reset sentiment quickly, and Fluor’s history gives the market every reason to act on that instinct.
End market slowdown is the other risk. Data centers and LNG are driving near-term backlog growth. A pullback in hyperscaler Capex or a shift in energy policy could slow new contract awards. Fluor’s revenue is only as good as clients committing capital to new projects.
The revaluation is also a multi-year story. In the near term the stock can stay cheap.
We are aware of all of this. It is why the strike is set 18% below current prices.
Go deeper — further reading
David Einhorn pitching Fluor (Min 7:35)
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A quick note before you act.
This newsletter is for informational and educational purposes only. Nothing here constitutes financial advice or a recommendation to buy or sell any security. Options trading involves significant risk. Always do your own research and consult a qualified financial professional before making any investment decision.