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Flowserve (FLS) Up 10% YTD: Will the Momentum Continue?

Shares of Flowserve Corporation FLS have gained around 10% in the year-to-date period, outperforming the industry’s 2.9% increase. Despite a volatile demand situation in 2023, strong booking levels have driven the stock higher.

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Zacks Investment Research

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Record levels of booking due to strong MRO and aftermarket activity are driving this Zacks Rank #1 (Strong Buy) company’s growth. The first-quarter bookings of $1.06 billion marked the company’s fifth consecutive quarter of above $1 billion bookings.

Following strong first-quarter performance, Flowserve has raised its 2023 guidance. The company expects revenues to increase 10-12% year over year in 2023 compared with 9-11% rise anticipated earlier. Adjusted earnings are estimated to be between $1.65 and $1.85 compared with $1.50-$1.75 anticipated earlier.

Flowserve aims to expand its product offerings by acquiring assets. In February 2023, the company inked a deal to acquire Velan Inc. in an all-cash transaction valued at approximately $245 million. The buyout will strengthen Flowserve’s valves portfolio and build upon its existing assets through the addition of Velan’s premier brands, strong heritage and technical expertise in diverse end markets. The deal is expected to be completed by the third quarter of 2023-end. Velan will become part of Flowserve’s Flow Control Division segment.

Flowserve’s consistent measures to reward its shareholders through dividend payments also might have boosted the stock. In 2022, the company’s dividend payments totaled $104.5 million. In the first quarter of 2023, it paid dividends of $26.2 million.

Will the Uptrend in Shares Last?

Flowserve’s solid booking levels highlight the strength across its end markets. This should help the company’s shares hold up well in the near term. The company’s Diversify, Decarbonize and Digitize (3D) strategy also supports its strong booking levels. Improving supply chains should drive FLS’ growth in 2023.

Other Key Picks

Some other top-ranked stocks within the broader Industrial Products sector are as follows:

Ingersoll Rand IR presently flaunts a Zacks Rank #1. The company delivered a four-quarter earnings surprise of 12.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingersoll Rand has an estimated earnings growth rate of 13.1%, on average. The stock has rallied 20% in a year.

Graco Inc. GGG currently sports a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 7.9%, on average.

Graco has an estimated earnings growth rate of 16.3% for the current year. The stock has appreciated 21.4% in a year.

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Flowserve Corporation (FLS) : Free Stock Analysis Report

Graco Inc. (GGG) : Free Stock Analysis Report

Ingersoll Rand Inc. (IR) : Free Stock Analysis Report

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