FLS
Flowserve Corporation
$68.89
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 22.0% above fair value
You pay
$68.89
Bear
$45.17
Fair
$56.47
Bull
$67.76
Bear
$45.17
-34.4%
$2.75 × 12x P/E
Fair
$56.47
-18.0%
$2.75 × 15x P/E
Bull
$67.76
-1.6%
$2.75 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $92.00 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $56.47 per share.
Warnings
Dividend-based valuation: $13.34 (below our primary estimate by 68%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $92.00 (from 31 analysts). Our estimate is 55% 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