Another Beat for Flowserve? - Analyst Blog
February 19 2013 - 12:10PM
Zacks
Flowserve Corp. (FLS) is expected to report its
fourthquarter 2013 results on Feb 21. Last quarter it posted a
+1.95% surprise. Let’s see how things are shaping up for this
announcement.
Why a Likely Positive Surprise?
Our proven model shows that Flowserve is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings Surprise
Prediction or ESP (Read: Zacks Earnings ESP: A Better Method),
which represents the difference between the Most Accurate estimate
and the Zacks Consensus Estimate, stands at +0.71%. This is very
meaningful and a leading indicator of a likely positive earnings
surprise for shares.
Zacks #3 Rank (Neutral): Investors shouldnote
that stocks with Zacks Ranks #1, #2 and #3 have a significantly
higher chance of beating earnings. The sell rated stocks (#4 and
#5) should never be considered going into an earnings
announcement.
The combination of Flowserve’s Zacks Rank #3 (Hold) and +0.71%
ESP makes us very confident about a positive earnings beat on Feb
21st.
What is Driving the Better-Than-Expected
Earnings?
Strong backlog exceeding $700 million, strong bookings
increasing in the high single-digits year over year and focused
end-user aftermarket strategies are expected to lead to a positive
earnings surprise in the upcoming quarter.
The positive trend is seen in the trailing four-quarter average
surprise of 1.08%, which was greatly helped by the 1.95% surprise
in the last reported quarter. This was possible because bookings by
end markets such as the oil and gas, and chemical industries, along
with modest growth in the general industries and water business
reported strong growth year over year.
Other Stocks to Consider
Flowserve is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
peers:
Altra Holdings (AIMC) with Earnings ESP of
+4.76% and Zacks #1 Rank (Strong Buy).
Graco Inc. (GGG) with Earnings ESP of +1.39%
and Zacks #2 Rank (Buy).
Idex Corp.(IEX) with Earnings ESP of +1.41% and
Zacks#2Rank (Buy).
ALTRA HOLDINGS (AIMC): Free Stock Analysis Report
FLOWSERVE CORP (FLS): Free Stock Analysis Report
GRACO INC (GGG): Free Stock Analysis Report
IDEX CORP (IEX): Free Stock Analysis Report
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