FLS
Flowserve Corporation
$68.20
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 72.2% above fair value
You pay
$68.20
Bear
$31.68
Fair
$39.60
Bull
$47.52
Bear
$31.68
-53.5%
$2.64 × 12x P/E
Fair
$39.60
-41.9%
$2.64 × 15x P/E
Bull
$47.52
-30.3%
$2.64 × 18x P/E
Adjust Assumptions
15.0x
2.64$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (31 analysts)
$89.60
Divergence from AlphaVal
56%
Summary
Applying a 15x P/E to adjusted EPS of $2.64, the base-case value is $39.60 per share. DDM cross-check: $14.02.
Warnings
Dividend-based valuation: $14.02 (below our primary estimate by 65%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $89.60 (from 31 analysts). Our estimate is 56% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples