Does Easing Short Interest in Flowserve (FLS) Quietly Recast Its Machinery-Sector Risk Narrative?

• Flowserve Corp recently reported that its short interest as a percentage of float fell 10.9% since the prior update, though at 5.56% it still sits above the 4.42% peer average, suggesting a recalibration in positioning by bearish investors.
• This reduction in short interest may indicate a shift toward a more constructive view of Flowserve’s prospects compared with its machinery peers, even as some investors remain cautious.
• With short interest easing yet still elevated, we’ll now examine how this changing sentiment interacts with Flowserve’s existing investment narrative.

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Flowserve Investment Narrative Recap

To own Flowserve, you generally need to believe that demand for its flow control equipment and aftermarket services in energy, chemicals, and water infrastructure can support steady revenue and margin progress. The recent easing in short interest does not materially change the near term picture, where the key catalyst remains execution on the existing US$2.9 billion backlog, while the main risk is project delays and pricing pressure in large engineered orders.

The most recent earnings report for Q3 2025, which showed higher sales and significantly stronger net income year over year alongside slightly lowered full year growth guidance, is particularly relevant here. Stronger profitability helps explain why some bearish positions may be moderating, but the guidance cut underlines that order timing and project approvals can still affect how quickly the backlog converts to revenue and earnings.

But investors should also recognize the risk that more competitive bidding on major projects could...

Read the full narrative on Flowserve (it's free!)

Flowserve's narrative projects $5.3 billion revenue and $620.7 million earnings by 2028.

Uncover how Flowserve's forecasts yield a $76.80 fair value, a 8% upside to its current price.

Exploring Other Perspectives

Seven fair value estimates from the Simply Wall St Community span roughly US$60 to US$163.51, showing how far apart individual views on Flowserve can be. You should weigh that diversity against the risk that tougher project bidding and pricing pressure could limit how quickly Flowserve converts its backlog into profitable growth.

Explore 7 other fair value estimates on Flowserve - why the stock might be worth 15% less than the current price!

Build Your Own Flowserve Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Flowserve research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Flowserve research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Flowserve's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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