Yahoo Finance Flowserve Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Flowserve Corporation (NYSE:FLS) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 4.7% to hit US$1.1b. Flowserve also reported a statutory profit of US$0.56, which was an impressive 23% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Flowserve
Taking into account the latest results, the current consensus from Flowserve's eleven analysts is for revenues of US$4.57b in 2024. This would reflect a satisfactory 3.3% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 43% to US$2.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.57b and earnings per share (EPS) of US$2.46 in 2024. So the consensus seems to have become somewhat more optimistic on Flowserve's earnings potential following these results.
The consensus price target rose 8.0% to US$53.90, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Flowserve, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$44.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Flowserve's rate of growth is expected to accelerate meaningfully, with the forecast 4.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.2% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 3.5% per year. Flowserve is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Flowserve following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Flowserve going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Flowserve that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
