We have issued an updated research report on Flowserve Corporation (FLS - Free Report) on Jan 8.
This flow control systems provider currently carries a Zacks Rank #3 (Hold), a revision from the earlier Zacks Rank #2 (Buy). Its market capitalization is approximately $5.1 billion.
A few growth drivers and certain headwinds, which might influence Flowserve, have been discussed below.
Factors Favoring Flowserve
Impressive Results & Solid Outlook: In the third quarter of 2018, Flowserve delivered better-than-expected results, with an earnings beat of 16.67%. Further, it’s quarterly bottom-line results of 49 cents per share expanded 32.4% year over year on the back of sales growth and margin expansion.
For 2018 (results not yet released), healthy demand in end-markets served, realignment initiatives and lower tax rates (of 27-28% versus 30% in 2017) will be beneficial, and aid bottom-line growth. The company anticipates adjusted earnings of $1.65-$1.75 per share, higher than $1.50-$1.70 mentioned earlier and roughly 25% (at the mid-point) year over year.
Solid results and outlook also lifted sentiments for Flowserve, which is evident from positive revision in bottom-line estimates. In the past 60 days, the stock’s earnings estimates for 2018 have been raised by six brokerage firms while that for 2019 has been raised by four firms and lowered by three. Currently, the Zacks Consensus Estimate for earnings is pegged at $1.75 for 2018 and $2.19 for 2019, reflecting growth of 2.9% and 1.9% from the respective tallies 60 days ago. Further, bottom-line estimates represent year-over-year growth of 28.7% for 2018 and 25.3% for 2019.
Flowserve Corporation Price and Consensus