Flowserve upgraded to Outperform from Neutral at Baird

Baird analyst Michael Halloran upgraded Flowserve (FLS) to Outperform from Neutral with an unchanged price target of $71. The recent underperformance creates an opportunity to turn more constructive on the shares, the analyst tells investors in a research note. The firm says Flowserve’s earnings power is attractive, as there is a “compelling internally-fueled margin expansion story.” The company’s revenue growth should remain at “healthy levels,” acquisitions are a potential “upside lever,” and its free cash flow conversion is improving, contends Baird. It sees a “compelling risk/reward” at current share levels.