RBC Capital elevated its price objective for Flowserve Corp. (NYSE:FLS) to $96.00 from $83.00 and kept an Outperform rating, citing the pump and valve maker's stronger-than-expected operational performance in the fourth quarter of 2025 and guidance for 2026 that sits above prior expectations.
The brokerage said Flowserve's newly announced 2030 targets imply roughly 520 basis points of margin improvement relative to 2025 levels. Those targets were central to RBC's thesis for a higher valuation, alongside continued growth in key end markets.
Flowserve also disclosed a $490 million deal to acquire Trillium, a specialist in nuclear valves. RBC described the transaction as reflecting a "reasonable" 12.3x multiple and said the acquisition should enlarge Flowserve's total addressable market for nuclear power plants by an estimated 15%-20%.
RBC pointed to robust expansion across Flowserve's power/nuclear, energy and general industrial segments. The note also emphasized ongoing "self-help opportunities" in operational excellence and potential gains from the company's 80/20 business approach as contributors to margin improvement.
Because of these dynamics, RBC named Flowserve its top pick for cyclical, risk-on exposure within the industrial sector in the accompanying research commentary.
Flowserve's reported fourth-quarter 2025 results showed an adjusted earnings per share of $1.11, ahead of the $0.94 analysts had expected. The company did, however, miss revenue consensus by a small margin. Management highlighted strategic initiatives and improved margins in discussing the quarter's financial performance.
Following the release of results and guidance, other firms updated their views. Stifel raised its price target to $97 and maintained a Buy rating, citing the company's strong outlook and guidance that topped consensus. Bank of America Securities increased its target to $90 from $80 while holding a Neutral rating, noting that Flowserve's earnings exceeded both BofA's estimates and consensus expectations.
Collectively, the analyst activity reflects a broadly favorable reception to Flowserve's recent results, margin ambitions and the Trillium acquisition. Analysts differ on near-term positioning - from Outperform and Buy to Neutral - but several have moved their targets higher in response to the quarter.
Investors will be watching the company's ability to convert its 2030 margin goals into measurable improvements and to integrate Trillium in a way that realizes the projected 15%-20% boost to its nuclear power plant market opportunity.