Oppenheimer Sticks to Its Hold Rating for Flowserve Corp

By Carrie Williams

Oppenheimer analyst Jim Giannakouros reiterated a Hold rating on Flowserve Corp (NYSE: FLS) yesterday. The company’s shares closed yesterday at $41.13, close to its 52-week high of $52.10.

Giannakouros noted:

“Shares dropped 11% today, after FLS reported adj. EPS of $0.22, well below $0.43E consensus, and FY17 guidance was lowered 18% at midpoint to $1.30-1.50. A higher tax rate due to operating losses in certain foreign countries drove a 46% effective tax rate, and the 2Q revenue shortfall was attributed to volumes pulled into 1Q and customers delaying acceptance of finished product (with the related under-absorption impact on margin). Our biggest takeaway from management, however, was CEO Rowe’s highlighting the need to intensify FLS’ ‘sense of urgency’ and accountability around simplification and cost-reduction efforts.”

According to TipRanks.com, Giannakouros is a 3-star analyst with an average return of 4.1% and a 54.9% success rate. Giannakouros covers the Industrial Goods sector, focusing on stocks such as Lincoln Electric Holdings, Watts Water Technologies, and Carlisle Companies Inc.

Currently, the analyst consensus on Flowserve Corp is Moderate Buy and the average price target is $48.80, representing a 18.6% upside.

In a report issued on July 28, Boenning & Scattergood also maintained a Hold rating on the stock.

Based on Flowserve Corp’s latest earnings report for the quarter ending June 30, the company posted quarterly revenue of $877 million and quarterly net profit of $41.88 million. In comparison, last year the company earned revenue of $1.03 billion and had a net profit of $63 million.

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Flowserve Corp. develops and manufactures precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in its customer’s critical processes. It also engaged in providing fluid motion and control products and services.