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On Wednesday, JPMorgan analysts maintained a Neutral rating for Chart Industries (NYSE: NYSE:GTLS), affirming a price target of $194.00. This follows the announcement of an all-stock merger of equals (MOE) with Flowserve (NYSE:FLS), creating a combined entity with an enterprise value of approximately $19 billion. Chart Industries, currently trading at $153.59 with a market cap of $6.96 billion, shows strong fundamentals with a perfect Piotroski Score of 9 according to InvestingPro analysis.
The merger aims to enhance the stability and predictability of earnings by diversifying the company’s end-market exposure. The combined company will serve sectors including industrial gas, energy, power generation, and data centers. A significant focus will be on increasing after-market services, which are expected to contribute 42% of the company’s revenue as a recurring revenue stream. Chart Industries has demonstrated solid performance with 11.65% revenue growth in the last twelve months, though its beta of 1.7 indicates higher volatility than the market average.
Financially, the merged entity is projected to generate $1.9 billion in EBITDA, with an EV/EBITDA multiple of 10x. The combined company has reported a pro forma cash flow from operations of $1.8 billion over the past year, along with a net debt to EBITDA ratio of 2.0x. Revenue growth is anticipated at 8%, with EBITDA margins at 21.5%. For deeper insights into Chart Industries’ valuation and growth potential, InvestingPro subscribers can access comprehensive financial health metrics and expert analysis in the exclusive Pro Research Report, one of 1,400+ detailed company analyses available on the platform.
Under the terms of the merger, Chart Industries shareholders will receive 3.165 shares of Flowserve for each GTLS share, resulting in a shareholder mix of 53.5% for Chart and 46.5% for Flowserve. The companies anticipate $300 million in annual cost synergies within three years of closing the transaction.
Leadership in the new entity will see Jill Evanko, CEO of Chart Industries, appointed as Chairman, while Scott Rowe, President and CEO of Flowserve, will assume the role of CEO.
In other recent news, Chart Industries has announced a merger with Flowserve in an all-stock transaction expected to complete in the fourth quarter of 2025. This merger will result in Chart Industries shareholders receiving 3.165 shares of Flowserve, with Chart Industries owning nearly 54% of the combined entity. BTIG has maintained a Buy rating on Chart Industries following this news, citing confidence in the company’s strategic direction. Meanwhile, S&P Global Ratings revised its outlook on Flowserve to positive, highlighting the potential benefits of the merger, though noting the integration risks.
Goldman Sachs has reiterated a Neutral rating on Chart Industries, projecting moderate growth in several segments, including Heat Transfer Systems and Specialty Products. Additionally, Barclays (LON:BARC) has increased its price target for Chart Industries to $171, maintaining an Equalweight rating, and recognized the company’s steady performance amidst challenges. In other corporate developments, Chart Industries held its 2025 annual meeting, where all director nominees were elected, and executive compensation was approved. The company also ratified Deloitte & Touche LLP as its independent auditor for the fiscal year.
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