Flowserve (FLS) Stock Forecast & Price Target

Flowserve Corp demonstrated strong financial performance with adjusted operating margins expanding by 370 basis points year-over-year to 14.8%, surpassing expectations. The company is experiencing notable growth in the North American and Middle Eastern markets, driven by a strategic focus on diversification and power infrastructure spending, particularly in nuclear and traditional power sectors. Additionally, robust aftermarket momentum and consistent performance in bookings, including $653 million in aftermarket bookings and total annual bookings reaching $4.7 billion, further underscore a positive outlook for the company.

Flowserve Corp has recently lowered its total sales and organic sales growth outlooks for the year, with organic sales guidance now expected at just 1%-3%, which is significantly below prior estimates and consensus expectations. Over the 2018-2022 period, the company experienced a total sales decline of 5.7% after peaking at $3.9 billion in 2019, with core sales growth averaging only 0.9% and a notable contraction in operating margins. Furthermore, significant uncertainties in the oil and gas sector, along with vulnerabilities in emerging markets, contribute to a negative outlook for the stock, especially as it trades at a discount compared to SMID-cap peers.