On Wednesday, Baird increased its price target for Flowserve Corp . (NYSE: FLS) to $60, up from the previous target of $57, while maintaining a Neutral rating on the shares. The firm recognized the company's underperformance in the market, noting a 3.5% decline compared to a 0.7% drop in the S&P 500 Index.
Despite the underperformance, Flowserve has reported record aftermarket bookings and provided a positive outlook with significant visibility extending into 2025 and beyond. The company's backlog and frontlog activities suggest a strong foundation for future growth.
The analyst highlighted the company's better-than-expected backlog to book-to-bill (BtB) ratio, which remains encouraging, staying above 1x through 2024. Additionally, Flowserve is reportedly ahead of schedule in reaching its 2027 targets, which bodes well for its long-term strategy.
Flowserve's recent performance indicates potential for upward estimate revisions, aligning with Baird's expectations. The company's current trajectory suggests that it is on a solid path to meet or exceed its goals in the coming years.
In other recent news, Flowserve Corporation (NYSE:FLS) has demonstrated robust financial growth with its second-quarter results, highlighted by a surge in earnings per share by over 40% and a revenue increase of over 7%. A significant 12% rise in bookings, amounting to $1.25 billion, and a backlog expansion to $2.7 billion were also reported. Mizuho, in response to these strong results, maintained its Outperform rating on Flowserve and raised its price target from $53 to $58.
The firm also revised its estimated earnings per share for Flowserve upwards for 2024 and 2025, citing effective operational execution. In addition to the financial growth, Flowserve secured three major contracts in the Middle East, contributing to an overall increase in market reach. Despite a current negative operating cash flow, Mizuho anticipates an upswing in the latter half of the year due to improved cash management.
The company has also raised its full-year adjusted EPS guidance to reflect confidence in a stronger performance in the coming months. These are recent developments that reflect a positive trajectory for Flowserve.
InvestingPro Insights
Flowserve Corp (NYSE: FLS) appears to be a company with a solid foundation for future growth, underscored by Baird's recent price target increase. In line with this optimistic view, InvestingPro data shows that Flowserve has a market capitalization of $6.55 billion, reflecting its substantial presence in the industry. Additionally, the company's revenue growth over the last twelve months as of Q2 2024 stands at 13.39%, indicating a healthy expansion of its business operations.
InvestingPro Tips further enrich the analysis, noting that Flowserve maintains a streak of dividend payments for 18 consecutive years, a testament to its financial stability and commitment to shareholder returns. Moreover, the company's analysts predict profitability for this year, aligning with the positive outlook presented by Baird. However, investors should be aware that Flowserve is trading at a high P/E ratio relative to near-term earnings growth, suggesting that the stock might be priced optimistically compared to its earnings potential.
For those interested in a deeper dive into Flowserve's financial health and future prospects, InvestingPro offers additional insights, with a total of 7 tips available to guide investment decisions. To explore these insights, visit https://www.investing.com/pro/FLS for a comprehensive analysis.
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