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.”
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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

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.

AECOM

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.

AECOM’s fiscal 2020 revenue dipped by around 3% year over year, and the full-year net loss improved by about 30% to $186 million from a 2019 net loss of $261 million. For the 2021 fiscal year, analysts expect revenue to be about flat and earnings per share (EPS) to rise by 26% to $2.71 over adjusted 2020 EPS of $2.15

The stock’s 52-week price range is $21.76 to $62.89, and the high was posted Monday morning. Since August, AECOM’s shares have added 20%. With a consensus price target of $64.00, the shares are fully valued, and they trade at a multiple of around 23 times expected 2021 earnings. The company does not pay a dividend.
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KBR

Houston-based EPC company KBR Inc. (NYSE: KBR) has a significant presence in aerospace, defense and energy projects. The company operates in two segments, Government Solutions and Technology Solutions, having folded its Energy Solutions segment into the technology portion of the business. KBR stock has added about 42% since August.

Revenue for 2020 rose just over 2%, and adjusted EPS totaled $1.73, up about 2.3% year over year. The consensus estimate for 2021 calls for EPS of $2.12, an increase of 22%, on revenue of $5.95 billion, up 3.3% year over year.

KBR stock traded at around $33.15 on Monday, in a 52-week range of $12.00 to $34.68. The consensus price target on the stock is $36.67, implying a potential upside of almost 11%, with shares trading at about 16 times expected 2021 earnings. KBR pays a $0.40 annual dividend (yield of 1.17%).

Granite Construction

Granite Construction Inc. (NYSE: GVA) operates in four construction segments: transportation, water, specialty construction and materials. The company withdrew 2020 guidance in May and only filed its second- and third-quarter earnings reports in February. Earlier this month, the company said it would not be able to file its fourth-quarter and full-year 2020 reports on time. The company expects to file its reports by the end of this month.

Even given its accounting issues, Granite’s share price has doubled since mid-August. According to the company’s February filing, third-quarter revenue was up 2.2% year over year to $2.5 billion and gross profit rose nearly 40%. Operating cash flow totaled $138.7 million, the company’s strongest total since 2006.

In August, shares traded at around $19.60. Monday morning, shares came within 20 cents of the 52-week high of $40.75, well above the consensus price target of $27.00, and even above the high price target. The stock trades at about 20 times expected 2021 EPS of $2.01.

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