In a January pre-inauguration speech, President-elect Joe Biden outlined an infrastructure spending plan totaling some $2 trillion in accelerated spending on infrastructure programs like clean energy, public transit and road and bridge repair. Biden’s outline emphasized creating union jobs and addressing climate change. As outlined, Biden’s plan would include $50 billion this year to get the ball rolling.
On Sunday, House Speaker Nancy Pelosi said in a statement that “Congress must move swiftly to build on the historic Biden American Rescue Plan” and that she has instructed the chairs of appropriate House committees “to work with their Republican counterparts to craft a big, bold and transformation infrastructure package.”
In her statement, Pelosi would not say whether taxes would rise in order to pay for whatever materializes in an infrastructure package. There is, however, little political interest in raising the federal gasoline tax of 18.3 cents per gallon, even though the amount has not changed in 28 years.
President Biden is scheduled to give a prime-time speech Thursday evening outlining an infrastructure spending plan costing $1.5 trillion to $2.0 trillion, including $1,400 stimulus checks for U.S. taxpayers. Biden is expected to ask Congress soon after next week’s inauguration to pass a bill authorizing spending to repair the country’s crumbling roads, highways and bridges, including $50 billion for 2021.
Last August, we looked at four U.S.-based, publicly traded firms that stood to benefit from Biden’s infrastructure proposal. Since then, shares of these firms have increased by as much as 76%. Can their share prices rise even more?
Fluor Corp. (NYSE: FLR) provides engineering, procurement, construction (EPC) and maintenance services to customers in a variety of industries. According to a report at Construction Dive, Fluor is the top construction firm in the petroleum and industrial sectors.
The company posted revenue of $15.6 billion in 2020, and since last August, the company’s market cap has nearly doubled from around $1.7 billion to more than $3.1 billion, a jump of about 90%.
Fluor’s 52-week trading range is $2.85 to $23.60 a share, and the high was posted early Monday morning. With a price target of $18.25, the shares have outrun the consensus target but have a potential upside of 27% to the high target of $30. Shares trade at a multiple of around 43 times estimated 2021 earnings per share. Fluor has suspended its dividend payments.
Projects of Los Angeles-based EPC firm AECOM (NYSE: ACM) include bridges, sports stadiums, ports and buildings. The company reportedly has captured about 25% of federal spending on COVID-19 response work.