Jefferies has expressed a positive outlook on the merger between Flowserve (FLS, Financial) and Chart Industries, highlighting several key advantages for the new entity. The analyst emphasizes that the merger will lead to a broader range of offerings, cost efficiencies, and a stronger financial position. Both companies have already achieved significant progress toward their individual margin targets, and the merger is expected to leverage ongoing market strength and cost reductions effectively.
Jefferies anticipates that the combined company could achieve earnings of $5 per share by 2027, driven by steady demand in the energy and power sectors, along with strategic cost savings. Based on these projections, if the company trades at 17 times the estimated 2027 earnings, its stock could reach nearly $70. The firm maintains a Buy rating on Flowserve, setting a price target at $65, indicating confidence in its market position and growth prospects.
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 $62.50 with a high estimate of $75.00 and a low estimate of $54.00. The average target implies an upside of 21.08% from the current price of $51.62. 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 $47.95, suggesting a downside of 7.11% from the current price of $51.62. 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.
