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Here's Why You Should Hold on to Flowserve Stock Right Now
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Flowserve Corporation (FLS - Free Report) is benefiting from strength across its segments and accretive acquisitions. The company's efforts to reward its shareholders handsomely add to its appeal.
Headquartered in Irving, TX, Flowserve is a leading manufacturer and aftermarket service provider of comprehensive flow control systems globally. The company develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications that require high reliability.
Let’s discuss the factors that are likely to continue benefiting this company.
Business Strength: Solid momentum in the aftermarket business, driven by a strong demand for products and services in North America, Europe Middle East and Latin America, is a prime catalyst for the Flowserve Pumps Division segment’s growth. The segment’s bookings increased 21.2% year over year in the first quarter, with a book-to-bill ratio of above 1.0x. An increase in bookings across general industries, energy and power end markets is supporting the Flow Control Division segment’s performance.
End Market Strength: Strength in several end markets, along with its Diversify, Decarbonize and Digitize (3D) strategy, is driving Flowserve's booking levels. The company is witnessing improved customer orders resulting from large project wins in the energy end market. Strength in the chemical end market, led by an onshore unconventional gas project and a petrochemical project in the Middle East, has also been a positive. The company expects significant chemical capacity additions in the Middle East and modest improvement in overall global chemical demand in the quarters ahead. Solid booking level in the power generation market is also driven by the growth in data center capacity and increasing Artificial Intelligence activity.
Expansion Efforts: FLS believes in expanding its market presence, solidifying its customer base and enhancing product offerings through acquisitions. In October 2024, Flowserve completed the acquisition of MOGAS Industries. The MOGAS acquisition augmented the company’s existing valve and automation product portfolio and accelerated its 3D growth strategy by significantly boosting its direct mining and mineral extraction exposure. The company has been integrated into Flowserve’s Flow Control Division segment and improved its aftermarket potential and generated revenue growth synergies. In the first quarter of 2025, the buyout had a positive contribution of 3.3% to its sales growth.
In July 2024, FLS acquired the intellectual property and in-process R&D related to cryogenic liquefied natural gas (LNG) submerged pump technology, systems and packaging from NexGen Cryogenic Solutions Inc. NexGen’s pump and cold energy recovery turbine technology for the liquefaction, shipping and regasification markets expanded the company’s LNG product portfolio and complemented its existing pumps, valves and mechanical seals offering.
Rewards to Shareholders: FLS rewards its shareholders handsomely through dividend payments and share buybacks. In the first three months of 2025, the company used $27.6 million to distribute dividends and bought back shares worth $21.1 million.
Shares of this Zacks Rank #3 (Hold) company have gained 1.7% in the past year compared with the industry’s 0.2% growth.
Image Source: Zacks Investment Research
Downsides of FLS
High Costs: FLS has been dealing with the negative impact of high operating costs and expenses over time. In the first quarter of 2025, the cost of sales increased 3.6% year over year to $775.2 million due to higher input costs. The metric, as a percentage of net sales, was 67.7%. Selling, general and administrative expenses increased 6.5% in the same period.
Forex Woes: Flowserve’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar may require the company to either raise prices or contract profit margins in locations outside the United States. For instance, currency headwinds had an adverse impact of 2.2% on sales growth in the first quarter.
CCK delivered a trailing four-quarter average earnings surprise of 16.3%. In the past 60 days, the Zacks Consensus Estimate for Crown Holdings’ 2025 earnings has increased 3.8%.
AptarGroup, Inc. (ATR - Free Report) presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 7.3%.
In the past 60 days, the consensus estimate for ATR’s 2025 earnings has increased 5.4%.
The Gorman-Rupp Company (GRC - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 2.4%.
The Zacks Consensus Estimate for GRC’s 2025 earnings has increased a penny in the past 60 days.
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Here's Why You Should Hold on to Flowserve Stock Right Now
Flowserve Corporation (FLS - Free Report) is benefiting from strength across its segments and accretive acquisitions. The company's efforts to reward its shareholders handsomely add to its appeal.
Headquartered in Irving, TX, Flowserve is a leading manufacturer and aftermarket service provider of comprehensive flow control systems globally. The company develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications that require high reliability.
Let’s discuss the factors that are likely to continue benefiting this company.
Business Strength: Solid momentum in the aftermarket business, driven by a strong demand for products and services in North America, Europe Middle East and Latin America, is a prime catalyst for the Flowserve Pumps Division segment’s growth. The segment’s bookings increased 21.2% year over year in the first quarter, with a book-to-bill ratio of above 1.0x. An increase in bookings across general industries, energy and power end markets is supporting the Flow Control Division segment’s performance.
End Market Strength: Strength in several end markets, along with its Diversify, Decarbonize and Digitize (3D) strategy, is driving Flowserve's booking levels. The company is witnessing improved customer orders resulting from large project wins in the energy end market. Strength in the chemical end market, led by an onshore unconventional gas project and a petrochemical project in the Middle East, has also been a positive. The company expects significant chemical capacity additions in the Middle East and modest improvement in overall global chemical demand in the quarters ahead. Solid booking level in the power generation market is also driven by the growth in data center capacity and increasing Artificial Intelligence activity.
Expansion Efforts: FLS believes in expanding its market presence, solidifying its customer base and enhancing product offerings through acquisitions. In October 2024, Flowserve completed the acquisition of MOGAS Industries. The MOGAS acquisition augmented the company’s existing valve and automation product portfolio and accelerated its 3D growth strategy by significantly boosting its direct mining and mineral extraction exposure. The company has been integrated into Flowserve’s Flow Control Division segment and improved its aftermarket potential and generated revenue growth synergies. In the first quarter of 2025, the buyout had a positive contribution of 3.3% to its sales growth.
In July 2024, FLS acquired the intellectual property and in-process R&D related to cryogenic liquefied natural gas (LNG) submerged pump technology, systems and packaging from NexGen Cryogenic Solutions Inc. NexGen’s pump and cold energy recovery turbine technology for the liquefaction, shipping and regasification markets expanded the company’s LNG product portfolio and complemented its existing pumps, valves and mechanical seals offering.
Rewards to Shareholders: FLS rewards its shareholders handsomely through dividend payments and share buybacks. In the first three months of 2025, the company used $27.6 million to distribute dividends and bought back shares worth $21.1 million.
Shares of this Zacks Rank #3 (Hold) company have gained 1.7% in the past year compared with the industry’s 0.2% growth.
Image Source: Zacks Investment Research
Downsides of FLS
High Costs: FLS has been dealing with the negative impact of high operating costs and expenses over time. In the first quarter of 2025, the cost of sales increased 3.6% year over year to $775.2 million due to higher input costs. The metric, as a percentage of net sales, was 67.7%. Selling, general and administrative expenses increased 6.5% in the same period.
Forex Woes: Flowserve’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar may require the company to either raise prices or contract profit margins in locations outside the United States. For instance, currency headwinds had an adverse impact of 2.2% on sales growth in the first quarter.
Stocks to Consider
Some better-ranked companies are discussed below:
Crown Holdings, Inc. (CCK - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CCK delivered a trailing four-quarter average earnings surprise of 16.3%. In the past 60 days, the Zacks Consensus Estimate for Crown Holdings’ 2025 earnings has increased 3.8%.
AptarGroup, Inc. (ATR - Free Report) presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 7.3%.
In the past 60 days, the consensus estimate for ATR’s 2025 earnings has increased 5.4%.
The Gorman-Rupp Company (GRC - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 2.4%.
The Zacks Consensus Estimate for GRC’s 2025 earnings has increased a penny in the past 60 days.