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1. Company Snapshot

1.a. Company Description

Flowserve Corporation designs, develops, manufactures, distributes, and services industrial flow management equipment in the United States, Europe, the Middle East, Africa, Asia, and internationally.It operates in two segments, Flowserve Pump Division (FPD) and Flow Control Division (FCD).The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines.


The FCD segment provides engineered and industrial valve and automation solutions, including isolation and control valves, actuation, controls, and related equipment, as well as equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities.This segment's products are used to control, direct, and manage the flow of liquids, gases, and fluids.The company primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications.


The company distributes its products through direct sales, distributors, and sales representatives.Flowserve Corporation was incorporated in 1912 and is headquartered in Irving, Texas.

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1.b. Last Insights on FLS

Flowserve Corporation's recent performance was driven by outstanding financial results, with Q4 2025 earnings reflecting a strong aftermarket business and expanding margins. The company achieved its long-term margin targets two years ahead of plan. Royal Bank Of Canada upgraded its rating, raising the price target from $83 to $96. Institutional investors, such as Universal Beteiligungs und Servicegesellschaft mbH, increased their holdings. Q4 earnings surpassed estimates with a margin expansion and higher bookings, reporting $1.11 per share, beating the Zacks Consensus Estimate.

1.c. Company Highlights

2. Flowserve's Q4 2025 Earnings: A Strong Finish to a Record Year

Flowserve reported a solid Q4 2025, with total revenues growing 4% year-over-year to $1.2 billion, driven by a 1% organic sales growth and a 240 basis point benefit from foreign currency translation. Adjusted gross margin expanded 320 basis points to 36%, and adjusted operating margin reached 16.8%, exceeding the company's 2027 long-term target range. Adjusted EPS came in at $1.11, a 59% increase compared to the prior year, beating analyst estimates of $0.94.

Publication Date: Feb -15

📋 Highlights
  • Aftermarket bookings surge: to $682M (+10% YoY), 7th straight quarter above $600M
  • Revenues grow 4%: to $1.2B driven by 1% organic growth and 240 bps FX tailwind
  • Margin expansion accelerates: 36% adjusted gross margin (+320 bps YoY), 16.8% operating margin (+420 bps YoY) surpassing 2027 targets
  • Operating cash flow jumps 19%: to $506M, $365M returned to shareholders via buybacks/dividends
  • 2026 guidance: 100 bps operating margin expansion, $4–$4.20 EPS (+13% YoY midpoint), 5–7% sales growth with 300 bps M&A boost

Segment Performance

The aftermarket segment continued to drive growth, with bookings increasing 10% to $682 million and sales rising 8% in the quarter. Original equipment revenues, however, declined 2%. The company's diversified portfolio and strong aftermarket activity helped offset the decline in original equipment revenues.

Guidance and Outlook

Flowserve expects total reported sales growth of 5% to 7% in 2026, with organic sales growth of 1% to 3%. The company anticipates adjusted operating margin expansion of approximately 100 basis points and adjusted EPS of $4 to $4.20, representing a midpoint increase of 13% versus 2025. The guidance assumes an adjusted tax rate of 21% to 22%.

Valuation and Metrics

With a P/E Ratio of 32.97 and an EV/EBITDA of 18.57, Flowserve's valuation multiples suggest that the market is pricing in a certain level of growth and profitability. The company's ROE of 15.81% and ROIC of 9.33% indicate a strong ability to generate returns on equity and invested capital. The dividend yield of 0.94% is relatively modest, but the free cash flow yield of 3.82% suggests that the company is generating significant cash flows.

Growth Prospects

Flowserve is well-positioned for growth in the power market, with bookings up mid-teens in Q4, driven by traditional power and nuclear growth. The company is also seeing strong growth in general industries, particularly in North America, Latin America, and the Middle East. With a strong backlog and a commitment to operational excellence, Flowserve is confident in its ability to achieve its long-term growth targets.

Strategic Initiatives

The company is focused on executing its strategic initiatives, including the 80/20 program, commercial excellence, and M&A. As Robert Rowe stated, "We've managed to expand margins by 500 basis points or 100 basis points per year" despite lack of significant revenue growth over the last 2 years. The company is confident in its ability to continue driving margin enhancements and achieving its long-term targets.

3. NewsRoom

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Flowserve Corporation (FLS) Presents at Citi's Global Industrial Tech & Mobility Conference 2026 Transcript

Feb -17

Source: seekingalpha.com

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Cookson Peirce & Co. Inc. Takes Position in Flowserve Corporation $FLS

Feb -14

Source: defenseworld.net

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Allianz Asset Management GmbH Purchases 26,266 Shares of Flowserve Corporation $FLS

Feb -11

Source: defenseworld.net

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Flowserve (NYSE:FLS) Sets New 12-Month High on Analyst Upgrade

Feb -10

Source: defenseworld.net

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Flowserve to Participate in Upcoming Investor Conferences

Feb -09

Source: businesswire.com

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Flowserve Corporation $FLS Shares Sold by Truist Financial Corp

Feb -09

Source: defenseworld.net

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Flowserve Q4 Earnings Call Highlights

Feb -08

Source: defenseworld.net

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Flowserve Corporation (FLS) Q4 2025 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.21%)

6. Segments

Flowserve Pump

Expected Growth: 4.5%

Flowserve Pump's 4.5% growth is driven by increasing demand for energy-efficient solutions, expansion in the oil and gas industry, and growing adoption of IoT-enabled pumps. Additionally, the company's strategic acquisitions, investments in digitalization, and focus on aftermarket services contribute to its growth momentum.

Flow Control

Expected Growth: 3.5%

Flow Control's 3.5% growth is driven by increasing demand for valves and actuators in the oil and gas industry, coupled with Flowserve's strategic expansion into emerging markets and investments in digitalization and IoT technologies, enabling improved operational efficiency and customer experience.

7. Detailed Products

Pumps

Flowserve offers a wide range of pumps, including centrifugal, positive displacement, and specialty pumps, designed for various industrial applications.

Seals

Flowserve provides a variety of mechanical seals, including cartridge seals, pusher seals, and mixer seals, designed for reliability and efficiency.

Valves

Flowserve offers a broad range of valves, including gate, globe, check, and ball valves, designed for precise control and reliability.

Actuators

Flowserve provides electric and pneumatic actuators, designed for precise control and reliability, used to operate valves and other equipment.

Controls

Flowserve offers a range of control systems, including instrumentation, automation, and monitoring systems, designed for efficient operation and optimization.

Repair and Services

Flowserve provides repair and maintenance services for pumps, valves, and other equipment, designed to extend equipment life and reduce downtime.

8. Flowserve Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Flowserve Corporation operates in a niche market, providing engineered and industrial pumps, valves, and seals to the oil and gas, chemical, and power generation industries. While there are some substitutes available, they are not as efficient or effective as Flowserve's products, reducing the threat of substitutes.

Bargaining Power Of Customers

Flowserve Corporation's customers are largely dependent on the company's products and services, giving them limited bargaining power. Additionally, the company's strong relationships with its customers and its ability to provide customized solutions reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Flowserve Corporation relies on a diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few key suppliers for critical components increases the bargaining power of these suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industries Flowserve Corporation operates in. The company's strong brand recognition, established customer relationships, and significant investments in research and development make it difficult for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry in the industries Flowserve Corporation operates in is high due to the presence of established competitors and the high stakes involved in the oil and gas, chemical, and power generation industries. The company must continually innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.05%
Debt Cost 5.20%
Equity Weight 57.95%
Equity Cost 11.12%
WACC 8.63%
Leverage 72.55%

11. Quality Control: Flowserve Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Graco

A-Score: 5.4/10

Value: 2.1

Growth: 5.2

Quality: 8.5

Yield: 2.0

Momentum: 4.5

Volatility: 10.0

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Franklin Electric Co

A-Score: 5.3/10

Value: 3.3

Growth: 6.8

Quality: 6.6

Yield: 2.0

Momentum: 4.0

Volatility: 9.0

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Flowserve

A-Score: 5.1/10

Value: 4.4

Growth: 4.6

Quality: 6.7

Yield: 3.0

Momentum: 7.5

Volatility: 4.7

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Nordson

A-Score: 5.1/10

Value: 2.5

Growth: 5.8

Quality: 7.1

Yield: 2.0

Momentum: 4.0

Volatility: 9.0

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IDEX

A-Score: 4.7/10

Value: 2.9

Growth: 4.9

Quality: 7.0

Yield: 3.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

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Kadant

A-Score: 4.0/10

Value: 2.7

Growth: 6.4

Quality: 7.0

Yield: 0.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

88.94$

Current Price

88.94$

Potential

-0.00%

Expected Cash-Flows