Flowserve (FLS, Financial) and Chart Industries are on the verge of finalizing an all-stock merger, potentially to be announced soon. The merger would create a combined entity with an estimated value of $19 billion, including debt. According to sources, the proposed terms would see Chart shareholders receiving 3.165 shares of Flowserve stock for each Chart share they currently hold. This arrangement would result in Chart shareholders owning 53.5% of the newly formed company, while Flowserve shareholders would hold the remaining 46.5% stake. The merger is being positioned as a union of equal partners.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Flowserve Corp (FLS, Financial) is $61.90 with a high estimate of $75.00 and a low estimate of $53.00. The average target implies an upside of 22.53% from the current price of $50.52. More detailed estimate data can be found on the Flowserve Corp (FLS) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Flowserve Corp's (FLS, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Flowserve Corp (FLS, Financial) in one year is $47.93, suggesting a downside of 5.13% from the current price of $50.52. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Flowserve Corp (FLS) Summary page.
FLS Key Business Developments
Release Date: April 30, 2025
- Bookings: Increased 18% to $1.2 billion.
- Revenue: Grew 5% to $1.1 billion.
- Adjusted Gross Margin: Expanded 180 basis points to 33.5%.
- Adjusted Operating Margin: Reached 12.8%, a 190 basis point increase.
- Adjusted Earnings Per Share (EPS): $0.72, up nearly 25% from the prior year.
- Book-to-Bill Ratio: 1.07 times.
- Aftermarket Bookings: Record of almost $690 million.
- Nuclear Bookings: Exceeded $100 million for the third consecutive quarter.
- Backlog: Stands at $2.9 billion.
- Cash from Operations: $50 million use of cash due to higher temporary working capital requirements.
- Share Repurchases: $53 million year-to-date at an average cost of $45 per share.
- 2025 Guidance: Reaffirmed with organic growth of 3% to 5% and adjusted EPS of $3.10 to $3.30.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Flowserve Corp (FLS, Financial) reported an 18% increase in bookings, reaching $1.2 billion, demonstrating strong demand for its products.
- The company achieved a 5% revenue growth and expanded adjusted gross margins by 180 basis points to 33.5%.
- Adjusted operating margins improved to 12.8%, with adjusted earnings per share increasing by nearly 25% to $0.72.
- Record aftermarket bookings of almost $690 million, marking the fourth consecutive quarter above $600 million, highlight the success of Flowserve's aftermarket business strategy.
- Flowserve's nuclear bookings exceeded $100 million for the third consecutive quarter, with power bookings up more than 45% year-over-year, indicating robust demand in critical industries.
Negative Points
- The current tariff environment introduces uncertainty, with an estimated annualized gross impact of $90 million to $100 million before mitigation.
- Macroeconomic uncertainties pose potential risks to Flowserve Corp (FLS)'s outlook, particularly in the second half of 2025.
- The company faces challenges in managing the impact of tariffs on imported materials, such as castings and forgings, which are sourced from China, India, and Mexico.
- Flowserve Corp (FLS) is experiencing limited project deferrals in select industries like mining and renewables, which could impact future bookings.
- The timing of tariff impacts and mitigating actions may lead to mismatched margins, particularly affecting the flow control side of the business more than pumps.
