KeyBanc reported that they have initiated coverage of control systems manufacturer, Flowserve Corporation(FLS) on Tuesday.
The firm announced that they are beginning coverage of FLS with a rating of “Buy,” and a price target of $160. This price target suggests a 13% increase from the stock’s current price of $138.60.
An analyst from the firm commented, “with respect to our overall coverage universe, our broad thesis suggests the highest quality names with long-standing execution track records, solid balance sheets, businesses benefiting from long-term secular trends, strong free cash flow generation and proven acquisition models offer investors the most compelling long-term opportunity for value creation (and, not surprisingly, typically come at premium multiples). We believe that FLS is among this group of companies. The current management team, in our view, has established a strong execution track record through the current cycle and has provided strategic direction for revenue and margin growth going forward by expanding the Company’s aftermarket capabilities and geographic breadth. We believe the Company’s overall mix of aftermarket business at 40% offers a degree of earnings and cash flow visibility over the course of an economic cycle. We also gravitate to companies that have exposure to long cycle, backlog oriented markets.”
Flowserve shares were mostly flat during premarket trading Tuesday. The stock is up 40% YTD.
The Bottom Line
Shares of Flowserve (FLS) have a 1.04% dividend yield, based on last night’s closing stock price of $138.60. The stock has technical support in the $127-$130 price area. The stock is trading right near all-time highs.
Flowserve Corporation(FLS) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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