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Flowserve (FLS) Surges 6.8%: Is This an Indication of Further Gains?

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Flowserve (FLS - Free Report) shares soared 6.8% in the last trading session to close at $51.88. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.8% loss over the past four weeks.

Flowserve’s rally is primarily driven by optimism about the strong momentum in its aftermarket business, due to the strong demand for products and services in North America, Europe Middle East and Latin America. An increase in bookings across general industries, energy and power end markets is supporting the company’s performance.

This company that makes pumps, valves and other parts for the oil and gas industries is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +5.5%. Revenues are expected to be $1.21 billion, up 4.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Flowserve, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FLS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Flowserve is part of the Zacks Manufacturing - General Industrial industry. IHI CORP (IHICY - Free Report) , another stock in the same industry, closed the last trading session 7.9% lower at $26.35. IHICY has returned 12.9% in the past month.

IHI CORP's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.2. Compared to the company's year-ago EPS, this represents no change. IHI CORP currently boasts a Zacks Rank of #1 (Strong Buy).


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