Report
Valens Research

FLS - Embedded Expectations Analysis - 2018 02 05

 Flowserve Corporation (FLS:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 29.4x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about growth, costs, and industry trends

 Specifically, management may have concerns about the sustainability of per share adjusted earnings growth, and may be concerned about their major bookings being delayed and moved out to 2018. They may also be concerned about further costs related to losses in sales leverage, under absorption, and increased variable incentive compensations. Furthermore, they may be overstating the advancement of the second wave of North American ethylene crackers, and may be concerned about the competitive nature of newbuild fossil opportunities in Asia
Underlying
Flowserve Corporation

Flowserve is a manufacturer and aftermarket service provider of flow control systems. The company develops and manufactures flow control equipment integral to the movement, control and protection of the flow of materials in its customers' processes. The company's segments are: Flowserve Pump Division, which are for custom, pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and Flow Control Division, which are for engineered and industrial valves, control valves, actuators and controls and related services.

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Valens Research
Valens Research

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