Flowserve is the IBD Stock Of The Day as it eyes an early buy point after strong earnings and guidance. Flowserve stock rose near highs Friday.
The Irving, Texas-based company makes valves, pumps, highly engineered sealing systems and other components critical to an array of various industries. The company reported that for 2022 40% of its bookings, or initial contracts, were from oil and gas industry customers. Chemicals industries were 22% and power generation represented 12%.
Flowserve Stock Near Buy Point
Flowserve shares edged up 0.4% to 39.40 in Friday's stock market action.
The stock has been trading tightly, riding higher on technical support at its 10-week moving average. Flowserve stock has gained 21% since late May.
The ideal time to enter FLS stock was probably Aug. 2, following its earnings beat for the second quarter.
But a move above Thursday's high of 39.62 could offer an entry from the mini-shelf pattern. That would be an aggressive, alternative buy point — particularly with the market's uptrend under pressure.
On Aug. 4, Flowserve shares hit a 52-week high of 40.15. Year to date, the industrial stock is up more than 28% amid an earnings turnaround.
Flowserve stock earns a near-perfect IBD Composite Rating of 98 out of a best-possible 99. Its RS Rating of 84 means it has outperformed 84% of all stocks in IBD's database over the past year.
Flowserve Earnings: Beat And Raise
On Aug. 1, the company crushed earnings estimates for the second quarter.
Year over year, Flowserve earnings rebounded 73% in the three months through June, FactSet shows. That marked the third consecutive quarter of earnings growth after a string of declines. Revenue bounced nearly 23% vs. a year ago.
The company also raised full-year earnings and revenue guidance. In the Q2 earnings release, Flowserve touted "significantly improved execution, near-record backlog levels, and healthy market outlook."
Analysts now expect Flowserve earnings to rebound 78% for the full year, rising a further 23% in 2024.
Earnings declined 20% in both 2021 and 2022. The company cited challenges tied to the supply chain, labor and logistics.
At least six analysts hiked price targets on Flowserve stock after its earnings beat-and-raise, FactSet shows. No one cut.
Among the firms hiking, RBC Capital kept its outperform rating and lifted the 12-month price target to 50 — about 27% above where shares traded on Friday.
Flowserve delivered an impressive Q2 earnings beat, the firm's analyst told investors in a research note. While there were pockets of destocking at distribution channels, the impacts were modest and offset by strong project funnel and overall bookings activity, they added.
Analysts at RBC added the company needs to show consistent order conversion to be confident it has turned the corner, according to The Fly.
