Jefferies positive on Flowserve merger, sees path to $70 per share

Jefferies is positive on the Flowserve (FLS), Chart Industries (GTLS) merger. The combined company benefits from an expanded product offering, cost savings, and improved balance sheet, the analyst tells investors in a research note. The firm says both companies have already made significant progress on individual margin goals, and that the combination should capitalize on continued end market strength and cost savings. Jefferies sees potential earnings of $5 per share by 2027 as the combined company benefits from secular demand in energy, power and cost savings. Assuming the combined company trades at 17-times estimated 2027 earnings suggests an almost $70 stock price, adds the firm. It has a Buy rating on Flowserve with a $65 price target.