Flowserve stock holds Buy rating and $75 target at TD Cowen

On Thursday, TD Cowen maintained a positive stance on Flowserve Corp . (NYSE: FLS), reiterating a Buy rating and a price target of $75.00. Currently trading at $57.71, the stock has significant upside potential according to analyst consensus, with targets ranging from $62 to $80. InvestingPro analysis shows the company’s overall financial health score is "GOOD," with particularly strong profitability metrics. The firm’s analyst Joseph Giordano expressed continued confidence in the company following its fourth-quarter performance, which revealed no surprises that would deter a bullish perspective. Flowserve’s bookings surpassed expectations, and segment margins appeared healthy, with the company achieving a gross profit margin of 32.16% and maintaining dividend payments for 19 consecutive years. A noted decrease in backlog conversion for 2025 was attributed to significant power project wins with extended timelines, suggesting robust momentum leading into 2026. This outlook is further bolstered by the initiation of an 80/20 optimization strategy and strong recent performance, with the stock delivering a 42% return over the past year.

Giordano also highlighted the potential for Flowserve to attract a new class of investors interested in the energy transition theme. The analyst anticipates a strategic refresh in marketing this year that could repackage data to appeal to investors currently underrepresented in the company’s investor base. This shift could influence the valuation multiples that investors are willing to pay for Flowserve’s financial results.

Moreover, the analyst pointed out that Flowserve’s share performance on Thursday did not worsen after the market opened, which was seen as a positive indicator. Nevertheless, Giordano emphasized the importance of the company’s operational delivery, stating that the first quarter of the year would be critical for Flowserve to present a "cleaner" quarter that reinforces the already strong narrative and momentum the company enjoys. For deeper insights into Flowserve’s financial health and future prospects, investors can access comprehensive analysis through InvestingPro’s detailed Research Report, which is part of their coverage of over 1,400 US stocks.

Flowserve’s role in the oil and gas sector, which includes involvement in liquefied natural gas (LNG), carbon capture, and hydrogen, is part of the broader energy transition narrative that could become more appealing to investors as the company refines its marketing approach. The company operates with a moderate level of debt and maintains strong liquidity, with a current ratio of 1.97. The analyst’s comments suggest that as Flowserve aligns its operations and messaging with investor interests in the energy transition, it could experience positive effects on its stock valuation, which currently shows a PEG ratio of 0.54, indicating potential value relative to its growth prospects.

In other recent news, Flowserve Corporation (NYSE:FLS) reported fourth-quarter earnings that did not meet analyst expectations, with adjusted earnings per share of $0.70 compared to the consensus of $0.77. Revenue for the quarter was $1.18 billion, slightly below the $1.21 billion estimate, but it represented a 1.3% increase year-over-year. Despite the earnings miss, Flowserve’s Q4 bookings rose by 12.6% year-over-year, reaching $1.18 billion, while the company’s backlog increased by 3.5% to $2.79 billion. The company provided full-year 2025 guidance for adjusted EPS between $3.10 and $3.30, which is close to the analyst consensus of $3.24, and expects organic sales growth of 3% to 5% for the year.

Flowserve’s operating margin improved to 10.6% from 9.4% a year ago, and the company generated $197.3 million in operating cash flow for the quarter, marking a 1.4% increase year-over-year. In another development, Mizuho (NYSE:MFG) Securities raised its price target for Flowserve to $70 from $65, maintaining an Outperform rating. The analysts noted strong booking activity, with total orders reaching $1.2 billion, and highlighted the company’s ongoing 80/20 program, which is expected to enhance margins by 2025. Mizuho also increased its adjusted EPS estimates for 2025 and 2026, citing expectations of stronger order growth. Additionally, Flowserve’s Board of Directors authorized a quarterly cash dividend of $0.21 per share, payable in April 2025.

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