Given their increased confidence in the longevity of this infrastructure spending cycle, the firm is raising their 2008 earnings estimate by $0.24 to $4.66 per share (+29% YOY), which now assumes 9.5% organic revenue growth (versus original estimate of6%) and a 130 bps improvement in operating margin to 11.6% (versus original 11.4% estimate).
The upside to estimates stems primarily from higher assumed revenue growth across each of the segments as the firm expects double-digit orders growth to continue throughout 2007 and in turn drive near double-digit revenue growth in 2008.
Additionally, they believe the best is yet to come within both the Pump and Valve divisions. The Pump segment is on the verge of seeing a meaningful acceleration in higher-margin aftermarket work associated with the most recent round of large projects going into service.
Notablecalls: Looks like Baird's 2008 EPS estimate is now the new street high. The firm has been positive on this industrial flow equipment player for quite a while now and rightly so. FLS has been a stellar performer.
I would call this one actionable right here if the chart didn't tell me otherwise. A case where technicals trump the fundamental side. I'd love to buy this one a couple of bucks lower (near the 50 day MA)! One to keep on the radar.
FLS 1-yr chart