September 27, 2023 12:53 am
Flowserve: Business Is Moving In The Right Direction (NYSE:FLS)

Transform And Succeed

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My thesis for Flowserve (NYSE:FLS) continues to head toward the correct direction as 1Q23 come in stronger than expected and management raised FY23 guidance. Recall previously I mentioned that FLS is currently undergoing a transformation that will span several years and position the company for greater growth stability and higher returns over the long term. I have faith in the management team’s ability to execute this plan and believe that the upward trend in commodity prices will support its progress. Management did not disappoint in 1Q23. FLS reported a healthy 1Q23 segment EBIT, with the company’s success being driven by the Pumps division. Given the robust $2.6 billion in backlog, I think growth is fairly obvious going forward. In particular, management highlighted March 2023 growth as being stronger than anticipated due to the company’s ability to ship more thanks to enhanced operational performance. All in, I believe the combination of a strong backlog and strong execution will lead FLS to achieving its FY23 guidance.

Own calculations

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