We are upgrading our recommendation on Flowserve to Neutral from
Underperform following the company's SIHI acquisition in November.
This acquisition is expected to boost the opportunistic investments
and product offering expansions for Flowserve in the long term.
Also, after the completion of the buyout, margins for the company's
Industrial Product Division are expected to be enhanced by 14 15%.
Moreover, Flowserve's recent share repurchase authorization
enhanced investors' confidence in the stock. However, the
unfavorable currency translations and short-term realignment
expenses remain matters of concern for the company. Also,
competitive pressure tends to drag the company's financials.
Flowserve Corporation was founded in 1912 and is headquartered
in Irving, TX. The company is a leading manufacturer and
aftermarket service provider of comprehensive flow control systems,
globally. Flowserve develops and manufactures precision-engineered
flow control equipment, such as pumps, valves, and seals, for
critical service applications that require high reliability.
Flowserve uses its manufacturing platform to offer a broad array of
aftermarket equipment services, such as installation, advanced
diagnostics, repair, and retrofitting. The company uses a footprint
of Quick Response Centers (QRCs) around the globe to deliver these
Flowserve Corporation operates in over 50 countries in North
America, Europe, the Middle East, Africa, the Asia Pacific, and
Latin America. Flowserve currently has three reportable
FSG Engineered Product Division (EPD): The segment's operations
include the longer lead-time, highly engineered pump product
operations of the former Flowserve Pump Division and substantially
all of the mechanical seal operations of the former Flow Solutions
Division. The segment accounts for around 51% of 2013 revenues.
FSG Industrial Product Division (IPD): The segment's operations
include the more standardized, general purpose pump product
operations of the former Flowserve Pump Division. The segment
accounts for around 19% of 2013 revenues.
Flow Control Division (FCD): The segment includes industrial
valve and related automation products and solutions. The segment
accounts for around 30% of 2013 revenues.
Flowserve Corporation (FLS): Read the Full Research
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FLOWSERVE CORP (FLS): Free Stock Analysis
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