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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for Flowserve Corp . (NYSE:FLS), increasing the price target to $70 from the previous $65, while maintaining an Outperform rating on the company’s shares. The adjustment follows Flowserve’s recent performance, where despite shares experiencing a recent 6% weekly decline, the company’s fourth-quarter earnings were largely positive. According to InvestingPro data, Flowserve maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics.
The company’s segment operating profit exceeded expectations, although a slight increase in corporate costs had some impact. Flowserve demonstrated robust booking activity, with Aftermarket (AM) bookings surpassing $600 million and total orders reaching $1.2 billion, which is considered the optimal level for absorption. This strong performance is reflected in the company’s revenue growth of 5.5% over the last twelve months, reaching $4.56 billion. Analysts at Mizuho have highlighted the progress in the company’s 80/20 program, which is anticipated to enhance margins in 2025 without significantly affecting the top line revenue.
Flowserve is also set to implement its Commercial Excellence program in the second half of the year. Mizuho’s analysts have expressed confidence in Flowserve’s ability to navigate tariffs effectively. The firm views the recent drop in Flowserve’s share price as an attractive opportunity for investors, noting that there has been no major fundamental change in the company’s outlook. InvestingPro analysis shows the company has maintained dividend payments for 19 consecutive years and operates with a moderate debt-to-equity ratio of 0.84.
Adjusted earnings per share (EPS) estimates have been increased by 5 cents for 2025 to $3.25, up from $3.20, and by another 5 cents for 2026 to $3.70, up from $3.65, based on the expectation of stronger order growth towards the end of the year. The revised price target reflects these increased EPS estimates, as Mizuho reiterates its Outperform rating on Flowserve stock. Notably, InvestingPro data indicates the stock is trading at an attractive PEG ratio of 0.53, suggesting potential value relative to its growth prospects. For deeper insights into Flowserve’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Flowserve Corporation reported fourth-quarter earnings that did not meet analyst expectations, with adjusted earnings per share of $0.70 falling short of the anticipated $0.77. The company’s revenue also missed estimates, coming in at $1.18 billion compared to the expected $1.21 billion, although it marked a 1.3% year-over-year increase. Flowserve’s bookings for the quarter saw a notable rise of 12.6% year-over-year, reaching $1.18 billion, and its backlog grew by 3.5% to $2.79 billion. The company provided its 2025 guidance with an adjusted EPS forecast of $3.10 to $3.30, slightly below the analyst consensus of $3.24. Despite the earnings miss, Flowserve’s operating margin improved to 10.6% from the previous year’s 9.4%, and it generated $197.3 million in operating cash flow for the quarter, up 1.4% year-over-year. Additionally, Flowserve’s Board of Directors declared a quarterly cash dividend of $0.21 per share, payable on April 11, 2025.
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