Analyst Brett Linzey of Mizuho Securities assigned a Buy rating on Flowserve (FLS – Research Report), retaining the price target of $50.00.
Brett Linzey has given his Buy rating due to a combination of factors related to Flowserve’s financial and operational performance. His optimism is largely driven by the company’s enhanced execution, which is reflected in their strong cash flow, improving margins, and a healthy level of orders. Flowserve is experiencing significant business momentum, underpinned by solid book-to-bill ratios and robust cash flow, which have markedly increased. They are also well-positioned to secure large projects thanks to a multi-year capital expenditure cycle, which further bolsters their future earnings outlook. Linzey has also increased his earnings per share (EPS) estimates for the coming years based on these positive trends in execution and project inflow.
Key aspects of the positive outlook include a backlog of projects that suggests earnings will be more heavily weighted toward the second half of the year, and the securing of substantial projects that are set to begin shipping in the fourth quarter. This indicates a strong future revenue stream. Additionally, Flowserve has shown a consistent ability to beat earnings expectations, as demonstrated by their first-quarter earnings surpassing estimates. The company has also witnessed growth across various segments and regions, with a particularly strong performance in the Middle East & Africa. Linzey’s conviction is further strengthened by Flowserve’s operational excellence program, which aims to improve efficiency through strategic consolidations. All these factors contribute to the Buy rating, underscoring the analyst’s confidence in Flowserve’s continued growth and profitability.
In another report released yesterday, Citi also maintained a Buy rating on the stock with a $59.00 price target.
Based on the recent corporate insider activity of 23 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FLS in relation to earlier this year.
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Flowserve (FLS) Company Description:
Flowserve Corp. engages in the manufacture and provision of aftermarket service for comprehensive flow control systems. It operates through the following segments: Flowserve Pump Division and Flow Control Division. The Flowserve Pump Division segment provides pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services. The Flow Control Division segment involves engineered and industrial valves, control valves, actuators and controls and related services. The company was founded in 1790 and is headquartered in Irving, TX.
