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Shares of Flowserve Corporation (FLS) rose approximately 8% to around $85 in trading on Friday following the release of fourth-quarter and full-year 2025 financial results. The stock approached recent highs, well above its 52-week low of $37.34, as investors focused on strong margin expansion and upbeat 2026 guidance despite a modest revenue miss.
Company Description: Flowserve is a leading manufacturer of flow control systems, including pumps, valves, and seals, for the global infrastructure markets. The company operates through two segments: Flowserve Pump Division (FPD) and Flow Control Division (FCD). It serves diversified end markets including oil and gas, chemical, power generation (with a growing emphasis on nuclear), and general industrial sectors, with a significant portion of revenue derived from high-margin aftermarket services.
Current Stock Price: ~$85 (close, Feb 6, 2026)
Market Capitalization: Approximately $11.2 billion
Valuation: Flowserve trades at a forward P/E ratio of approximately 20.6x based on the midpoint of 2026 adjusted EPS guidance. This reflects a premium compared to historical levels, supported by early achievement of long-term margin targets and projected double-digit earnings growth.
Strong Margin Expansion Offsets Muted Organic Revenue
Flowserve reported fourth-quarter 2025 revenue of $1.22 billion, up 3.5% year-over-year but below analyst consensus of approximately $1.26–$1.27 billion. Adjusted earnings per share (EPS) reached $1.11, a 59% increase from $0.70 in the prior-year period and well above the $0.94 forecast.
Adjusted Operating Margin: 16.8%, up 420 basis points year-over-year.
Adjusted Gross Margin: 36%, up 320 basis points.
Bookings: $1.2 billion, up 3% YoY; aftermarket bookings grew 10.4% to $682.3 million.
For the full year 2025, total revenue grew ~4% to $4.73 billion. Adjusted EPS was $3.64, up from $2.63 in 2024. The company generated $506 million in cash from operations, up 19% year-over-year.
2026 Guidance and Strategic Outlook
Management initiated 2026 adjusted EPS guidance of $4.00 to $4.20, representing ~13% growth at the midpoint. Total sales growth is expected at 5% to 7%, with organic revenue growth projected at 1% to 3%.
Metric
2025 Actual
2026 Guidance
Total Sales Growth
~4%
5% – 7%
Adjusted EPS
$3.64
$4.00 – $4.20
Organic Sales Growth
~1%
1% – 3%
The outlook highlights acceleration in nuclear and power markets, with nearly $100 million in nuclear bookings in Q4. The pending acquisition of Trillium Flow Technologies’ Valves Division (expected close mid-2026) is anticipated to be neutral to 2026 earnings.
Macro Pressures and Geopolitical Exposure
Flowserve continues to face customer project delays and inventory dynamics, which reduced organic revenue by approximately 50 basis points in Q4. Backlog conversion is projected at 76% in 2026 due to longer-tenure nuclear projects.
The company has exposure to geopolitical risks in regions such as the Middle East, where increased spending is expected to support original equipment bookings later in 2026. Supply chain disruptions and potential tariff impacts on material costs remain ongoing concerns for global operations.
Flowserve Corporation (FLS) SWOT Analysis
Strengths
Margin Performance: Achieved 2027 adjusted operating margin targets two years early.
Aftermarket Resilience: Seventh consecutive quarter of aftermarket bookings above $600 million.
Balance Sheet: Healthy net leverage of 1.0x, providing flexibility for M&A and shareholder returns.
Weaknesses
Revenue Growth: Tepid organic demand and project timing issues limit near-term top-line acceleration.
OE Volatility: Original equipment revenues declined 2% in Q4 due to customer delays.
Project Timing: Backlog conversion sensitive to schedules in long-cycle nuclear projects.
Opportunities
Nuclear Acceleration: Robust demand in nuclear and traditional power markets with consistent $100M+ quarterly awards.
Strategic M&A: Integration of Trillium Valves expands exposure to accelerating power end markets.
Service Digitalization: Expansion of digital solutions within the aftermarket segment to capture higher margins.
Threats
Cyclical Exposure: Heavy reliance on energy and chemical sectors makes the top line vulnerable to capital expenditure swings.
Macro Headwinds: Potential for sustained supply chain disruptions and margin-eroding tariff impacts.
Competitive Pricing: Intense competition for OE orders in slow-growth industrial markets could pressure margins.
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